Ban Looming: TikTok Must Find a Buyer

A U.S. federal appeals court on Friday upheld a law requiring Chinese-based ByteDance to divest its popular short video app TikTok in the United States by early next year or face a ban.

The decision is a win for the Justice Department and opponents of the Chinese-owned app and a devastating blow to ByteDance. It increases the possibility of an unprecedented ban in just six weeks on a social media app used by 170 million Americans.

Reuters reports the ruling is expected to be appealed to the Supreme Court.

The appeals court noted the law was the result of Republicans and Democrats working together, as well as two presidents, as "part of a broader effort to counter a well-substantiated national security threat posed by the PRC (People's Republic of China)."

But free speech advocates immediately criticized the decision. The American Civil Liberties Union said it sets a "flawed and dangerous precedent."

"Banning TikTok blatantly violates the First Amendment rights of millions of Americans who use this app to express themselves and communicate with people around the world,” said Patrick Toomey, deputy director of the ACLU's National Security Project.

TikTok said it expected the Supreme Court would reverse the appeals court decision on First Amendment grounds.

"The Supreme Court has an established historical record of protecting Americans' right to free speech, and we expect they will do just that on this important constitutional issue," TikTok said in a statement.

In its analysis, the court said China, through its relationship with TikTok parent ByteDance, threatened to distort U.S. speech through TikTok and "manipulate public discourse."

China's "ability to do so is at odds with free speech fundamentals. Indeed, the First Amendment precludes a domestic government from exercising comparable control over a social media company in the United States."

U.S. appeals court Judges Sri Srinivasan, Neomi Rao and Douglas Ginsburg considered the legal challenges brought by TikTok and users against the law, which gives ByteDance until Jan. 19 to sell or divest TikTok's U.S. assets or face a ban.

The decision -- unless the Supreme Court reverses it -- puts TikTok's fate in the hands of first President Joe Biden on whether to grant a 90-day extension of the Jan. 19 deadline to force a sale and then President-elect Donald Trump, who takes office on Jan. 20. But it's not clear whether ByteDance could meet the heavy burden to show it had made significant progress toward a divestiture needed to trigger the extension.