TikTok and its parent company ByteDance are urging a US appeals court to dismiss the Justice Department’s request to keep parts of its legal case against TikTok confidential. The government aims to file over 15% of its brief and 30% of its evidence in secret, which TikTok argues would hinder its ability to challenge any potentially incorrect factual claims.
The Justice Department, which has not commented publicly, recently filed a classified document outlining security concerns regarding ByteDance’s ownership of TikTok. The document includes declarations from the FBI and other national security agencies.
The government contends that TikTok’s Chinese ownership poses a significant national security threat due to its access to vast amounts of personal data from American users and China’s potential for information manipulation.
In response, TikTok maintains that it has never and will never share US user data with China or manipulate video content as alleged. The company suggests appointing a district court judge as a special master to review the classified submissions if the court does not reject the secret evidence.
The Biden administration has asked the court to dismiss lawsuits filed by TikTok, ByteDance, and TikTok creators that aim to block a law requiring the divestiture of TikTok’s US assets by 19 January or face a ban. Despite the lack of evidence that the Chinese government has accessed US user data, the Justice Department insists that the potential risk remains too significant to ignore.
A coalition of 21 states and over 50 US lawmakers has supported the Justice Department’s mandate requiring China-based ByteDance to sell TikTok’s US assets by 19 January or face a ban. The collective, led by the attorneys general of Montana and Virginia, argues that TikTok threatens national security and consumer privacy, citing risks of the Chinese Communist Party exploiting user data.
Prominent lawmakers, including US Representative John Moolenaar and Representative Raja Krishnamoorthi, emphasised that the law offers a straightforward solution to mitigate the national security threats posed by TikTok’s ownership structure. The legislative measure, passed by Congress in April, reflects widespread concern over potential data access and surveillance by China.
In response, TikTok, its parent company ByteDance, and a group of TikTok creators have filed lawsuits to block the law. They argue that the ban violates the First Amendment rights of the 170 million Americans who use the app and claim no evidence supports the government’s security concerns.
The US Court of Appeals for the District of Columbia is set to hear oral arguments on the legal challenge on 16 September, amidst the lead-up to the 2024 presidential election. The outcome of this case could significantly impact TikTok’s future operations in the United States.
ByteDance’s TikTok has agreed to permanently withdraw its TikTok Lite rewards program from the EU to comply with the Digital Services Act (DSA), according to the European Commission. The TikTok Lite rewards program allowed users to earn points by engaging in activities like watching videos and inviting friends.
In April, the EU demanded a risk assessment from TikTok on the app shortly after its launch in France and Spain, citing concerns about its potential impact on children and users’ mental health. Under the DSA, large online platforms must report potential risks of new features to the EU before launching and adopting measures to address these risks.
The available brain time of young Europeans is not a currency for social media—and it never will be ⏳🧠
We have obtained the permanent withdrawal of #TikTokLite “rewards”program, which could have had very addictive consequences.
TikTok has made legally binding commitments to withdraw the rewards program from the EU and not to launch any similar program that would bypass this decision. Breaching these commitments would violate the DSA and could lead to fines. Additionally, an investigation into whether TikTok breached online content rules aimed at protecting children and ensuring transparent advertising is ongoing, putting the platform at risk of further penalties.
The Federal Trade Commission (FTC), supported by the Department of Justice (DOJ), has filed a lawsuit against TikTok and its parent company ByteDance for violating children’s privacy laws. The lawsuit claims that TikTok breached the Children’s Online Privacy Protection Act (COPPA) by failing to notify and obtain parental consent before collecting data from children under 13. The case also alleges that TikTok did not adhere to a 2019 FTC consent order regarding the same issue.
According to the complaint, TikTok collected personal data from underage users without proper parental consent, using this information to target ads and build user profiles. Despite knowing these practices violated COPPA, ByteDance and TikTok allowed children to use the platform by bypassing age restrictions. Even when parents requested account deletions, TikTok made the process difficult and often did not comply.
FTC Chair Lina M. Khan stated that TikTok’s actions jeopardised the safety of millions of children, and the FTC is determined to protect kids from such violations. The DOJ emphasised the importance of upholding parental rights to safeguard children’s privacy.
The lawsuit seeks civil penalties against ByteDance and TikTok and a permanent injunction to prevent future COPPA violations. The US District Court will review the case for the Central District of California.
Russia’s communications regulator, Roskomnadzor, has fined Alphabet’s Google and TikTok for not complying with orders to remove banned content. The Tagansky district court in Moscow imposed a 5 million rouble ($58,038) fine on Google and a 4 million rouble fine on TikTok. These penalties were issued because both platforms failed to identify content similar to what was previously ordered to be removed.
This is part of a broader effort by Russia over the past several years to enforce the removal of content it considers illegal from foreign technology platforms. Although relatively small, the fines have been persistent, reflecting Russia’s ongoing scrutiny and regulation of online content.
Moscow has been particularly critical of Google, especially for taking down YouTube channels associated with Russian media and public figures. Neither Google nor TikTok immediately responded to requests for comment on the fines.
The US Justice Department has raised the alarm over TikTok’s potential influence on American politics, arguing that the app’s continued operation under ByteDance, its Chinese parent company, could enable covert interference by the Chinese government in US elections. In a recent federal court filing, prosecutors suggested that TikTok’s algorithm might be manipulated to sway public opinion and influence political discourse, posing a significant threat to national security.
The filing is part of a broader legal battle as TikTok challenges a new US law that could force a ban on the app unless its ownership is transferred by January 2025. The law, signed by President Joe Biden in April, addresses concerns over TikTok’s ties to China and its potential to compromise US security. TikTok argues that the law infringes on free speech and restricts access to information, as it targets a specific platform and its extensive global user base.
The Justice Department contends that the law aims not to suppress free speech but to address unique national security risks posed by TikTok’s connection to a foreign power. They suggest a possible solution could involve selling TikTok to an American company, allowing the app to continue operating in the US without interruption.
Why does this matter?
Concerns about TikTok’s data practices have been a focal point, with officials warning that the app collects extensive personal information from users, including location data and private messages. The department also pointed to technologies in China that could potentially influence the app’s content and raise further worries about the app’s role in data collection and content manipulation.
The debate highlights a clash between national security concerns and the protection of digital freedoms, as the outcome of the lawsuit could set a significant precedent for how the US handles foreign tech influence.
ByteDance, the owner of TikTok, lost its challenge against being labeled a gatekeeper under the EU Digital Markets Act (DMA). This ruling strengthens antitrust regulators’ efforts to limit the influence of Big Tech. The DMA requires gatekeepers to make messaging apps interoperable, allow users to choose pre-installed apps, and prevent them from favoring their services.
ByteDance argued that the designation could protect dominant companies from competition, but the Court of Justice of the EU (CJEU) ruled that the company had not substantiated its claims. The court highlighted TikTok’s significant growth, making it comparable to rivals such as Meta Platforms and Alphabet.
Judges noted that ByteDance met the DMA’s thresholds concerning global market value and the number of TikTok users within the EU. ByteDance expressed disappointment but mentioned it had already taken steps to comply with the DMA’s obligations before last March’s deadline.
Other companies designated as gatekeepers include Alphabet, Amazon, Apple, Booking.com, Meta Platforms, and Microsoft. Apple and Meta are also contesting their gatekeeper labels, with Apple arguing against the classification of its App Stores and iOS operating system.
Representative Cathy McMorris Rodgers stated that intelligence officials at the March hearing warned of dangers from foreign-controlled apps like TikTok, which could misuse American data. Despite the law, China has not intended to relinquish control over such applications, suggesting potential nefarious uses against Americans.
TikTok criticised the legislative process, claiming it was secretive and rushed. The Justice Department is set to respond to the legal challenges by 26 July, with a court hearing scheduled for 16 September.
The courts halted a previous attempt to ban TikTok by former President Trump in 2020. The current efforts focus on national security concerns, citing the app’s extensive data collection and the risks posed by Chinese ownership.
Oracle has cautioned investors that a potential US ban on TikTok could negatively impact its financial results. A new law signed by President Biden in April could make it illegal for Oracle to provide internet hosting services to TikTok unless its China-based owners meet certain conditions. Oracle warned that losing TikTok as a client could harm its revenue and profits, as TikTok relies on Oracle’s cloud infrastructure for storing and processing US user data.
Analysts consider TikTok one of Oracle’s major clients, contributing significantly to its cloud business revenue. Estimates suggest Oracle earns between $480 million to $800 million annually from TikTok, while its cloud unit generated $6.9 billion in sales last year. The cloud business’s growth, driven by demand for AI work, has boosted Oracle’s shares by 34% this year.
Why does it matter?
The new law requires TikTok to find a US buyer within 270 days or face a ban, with a possibility of extension. TikTok, which disputes the security concerns, has sued to overturn the law. It highlights its collaboration with Oracle, termed ‘Project Texas,’ aimed at safeguarding US data from its Chinese parent company, ByteDance. Despite this, Oracle has remained discreet about its relationship with TikTok, not listing it among its key cloud customers and avoiding public discussion.
Frank McCourt, a US real estate billionaire, aims to acquire TikTok to combat the negative influence of major tech platforms on society. Known for owning the Los Angeles Dodgers and Olympique de Marseille, McCourt has been vocal about the harm these platforms inflict, particularly on children. Speaking at the Collision tech conference in Toronto, he emphasised the manipulative nature of social media algorithms, linking them to societal chaos and political polarisation.
McCourt’s concern stems from the detrimental impact of social media on mental health, especially among children, citing rising anxiety, depression, and youth suicides. His solution is a ‘new internet’ based on an open-source, decentralised protocol where users control their own data, a vision he calls Project Liberty. With its vast user base of young people, acquiring TikTok would significantly advance this initiative. Project Liberty has garnered support from internet pioneer Tim Berners-Lee and NYU professor Jonathan Haidt.
The acquisition bid comes amid US government pressures on TikTok to divest from Chinese ownership due to national security concerns. While the future of TikTok’s ownership remains uncertain, McCourt hopes this situation will raise awareness about data privacy issues across all platforms, emphasising the need for user control over personal data to preserve democratic values.
