ByteDance Ltd., the Chinese owner of TikTok Inc., has a new deadline in December for filing documents as part of its court motion to block a US government-enforced sale of the video-sharing app.
The U.S. Court of Appeals in Washington on Thursday set December 14th and 28th for ByteDance and the Trump administration to file motions and other documents in the case.
ByteDance had a deadline Thursday to comply with an order from President Donald Trump to sell TikTok’s U.S. operations. Although the company received tacit approval from the Trump administration about two months ago for an agreement to sell part of TikTok to Oracle Corp. and Walmart Inc., the deal never closed. It has been in limbo for weeks and was quickly overshadowed by the US elections. The delay prompted TikTok to go to the appeals court on Tuesday to prevent a forced sale.
Trump’s order, which requires a sale by Nov. 12, includes a 30-day extension of the deadline, but the new dates go beyond that period. The Commerce Department said Thursday it would not enforce its TikTok shutdown order if a sale is not reached on time, citing a ruling by the Pennsylvania federal court last month, according to the Wall Street Journal. TikTok attorneys and officials from the finance department overseeing the sale and the trade department did not immediately respond to the request for comment.
Trump has made the battle for TikTok a central front in a broader trade war with China, particularly to combat the growing influence of the Chinese tech industry in the US. Trump first ordered a TikTok sale in August and threatened an app ban if ByteDance couldn’t reach an agreement with an American company. That proposed ban has since been postponed twice – most recently on October 30, when a judge in Pennsylvania issued an injunction in response to a lawsuit filed by a group of TikTok users who make their living on the app.
TikTok is one of the most popular apps in the world – with more than 100 million US users – and ByteDance’s main service outside of China. The company and its investors are desperate to close a deal to avoid a ban in a valuable market for other social media apps like Instagram from Facebook Inc. and Snapchat from Snap Inc.
The way the original order was phrased seems to require that a ByteDance sale be made within the deadline – not just an agreement. If the government reaches an agreement with the company, it could exercise discretion about when to enforce it, said Aimen Mir, partner at Freshfields Bruckhaus Deringer and former deputy assistant secretary of investment security at the Treasury Department, where he conducted reviews for the Foreign Affairs Committee Investment in the USA
“If Cfius remains silent for longer, it usually indicates that there is no clear consensus within the government about what the next step would be, but this has been an atypical case for some time,” Mir said.
If an extension has not yet been granted, the Justice Department would have to go to court and seek enforcement of the disposal order.
Trump’s August Executive Order does not provide a clear penalty for failing to sell himself, but says that “the attorney general has the power to take whatever steps are necessary to enforce this order.”
“There could be fines or it could be as draconian as a ban if the administration wanted to go that far,” said Carl Tobias, a law professor at the University of Richmond. “But the government has until midnight on November 12th to issue an extension, which is a plausible scenario.”
This sales process was originally done for national security reasons. The US government is concerned about ByteDance’s access to the personal information of US citizens.
Cifius, the Treasury Department’s body that reviews foreign acquisitions of American companies, said in a July 30 letter contained in ByteDance’s court file that its security concerns were based on both classified and unclassified information. The letter cited the move in 2017 by ByteDance’s Chinese subsidiary to set up a Communist Party committee in its government structure, and indicated that ByteDance also worked with public safety offices across China.
“The finance department continues to focus on finding a solution to the national security risks arising from the acquisition of Musical.ly by ByteDance,” a Treasury Department spokeswoman said in a statement, referring to the purchase of an app, the ByteDance Merged with TikTok in 2017. “With ByteDance, we have made it clear what steps are required to achieve this solution.” The Justice Department declined to comment.
Trump’s mandate, which requires the sale of TikTok, underscored his government’s aggressive stance on Chinese investments in the US. Since 1990, only seven foreign acquisitions by US companies have been blocked or wound up by US presidents, and Trump is responsible for four of them.
Now the TikTok deal, which was once a priority for the administration, has grown in urgency in recent weeks as Trump focused on his offer for re-election and, since last week, has been questioning the outcome of the November 3rd vote.
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