A federal appeals court panel unanimously upheld legislation on December 6, 2024, that could result in TikTok's prohibition in the United States by mid-January unless the platform separates from its Chinese parent company ByteDance.
According to court documents, the U.S. Court of Appeals for the District of Columbia Circuit rejected TikTok's petition challenging the law signed by President Biden in April. The court dismissed the company's argument that the statute violated First Amendment protections.
Judge Douglas Ginsburg, writing for the court, stated: "The First Amendment exists to protect free speech in the United States. Here the Government acted solely to protect that freedom from a foreign adversary nation and to limit that adversary's ability to gather data on people in the United States."
The ruling arrives amid escalating concerns about data security. According to the U.S. government's position, TikTok's data collection practices potentially expose sensitive information about American users' viewing habits to Chinese authorities through coercion. Officials have expressed concerns about the platform's proprietary algorithm's vulnerability to manipulation.
TikTok spokesperson Michael Hughes emphasized the scale of impact, stating the law "will silence the voices of over 170 million Americans here in the US and around the world on January 19th, 2025." The company maintains it has never shared user data with Chinese authorities or manipulated content at Beijing's request.
The legal challenge consolidated three separate cases: TikTok's primary lawsuit filed in May, a case brought by content creators, and a third action filed by conservative creators associated with BASED Politics Inc. The Knight First Amendment Institute submitted supporting documentation through an amicus brief.
Jameel Jaffer, executive director of the Knight First Amendment Institute, criticized the decision: "This is a deeply misguided ruling that reads important First Amendment precedents too narrowly and gives the government sweeping power to restrict Americans' access to information, ideas, and media from abroad."
The legislation's co-author, Democratic Rep. Raja Krishnamoorthi, expressed satisfaction with the outcome, stating it was time for ByteDance to accept the law's requirements. Republican Rep. John Moolenaar of Michigan, who chairs the House Select Committee on China, indicated optimism about potential American acquisition of the platform.
TikTok has invested over $2 billion in data protection measures for U.S. users. The company proposed a draft agreement to address government concerns more than two years ago, but negotiations stalled. The Justice Department deemed the proposed solutions insufficient.
ByteDance's attorneys argue that divesting TikTok presents significant commercial and technological challenges. They contend that selling the platform without its core algorithm, which Chinese authorities would likely restrict under any divestiture plan, would isolate the U.S. version from global content.
Several investors have expressed interest in acquiring TikTok's U.S. operations. Former Treasury Secretary Steven Mnuchin and billionaire Frank McCourt are forming consortiums to pursue purchase opportunities. A spokesperson for McCourt's Project Liberty initiative reported informal capital commitments exceeding $20 billion this week.
The European Union has raised parallel concerns, investigating potential platform manipulation in Romanian elections. The court's ruling emerges as global scrutiny of social media platforms' data handling practices intensifies.
The case may proceed to the Supreme Court, though acceptance remains uncertain. The political landscape adds complexity, as President-elect Donald Trump, who previously attempted to ban TikTok, has indicated opposition to such measures during his campaign. Rep. Michael Waltz, Trump's national security adviser designate, confirmed this shift in position during a Fox Business interview on December 6.