A federal judge on Sept. 27 temporarily halted President Donald Trump’s executive order that would have banned app stores from carrying popular short-video app TikTok beginning at 11:59pm on Sept. 27.
U.S. District Judge Carl Nichols in Washington issued a preliminary injunction late Sept. 27, but declined to postpone a more comprehensive ban to the app set for Nov. 12.
The ruling followed an emergency hearing that morning in which lawyers for TikTok argued that the administration’s app-store ban would infringe on First Amendment rights and do irreparable harm to the business.
Trump in August issued an executive order to bar U.S. transactions with TikTok’s Chinese parent company, ByteDance, citing national security risks. The U.S. administration says personal data collected on 100 million American users could be transferred to Beijing due to Chinese laws that compel companies to cooperate with security agencies when asked. The president issued a separate order in August compelling ByteDance to divest its U.S. assets by Nov. 12.
The injunction comes as ByteDance is scrambling to finalize a preliminary deal for Oracle, a database-storage company, and retail giant Walmart to acquire stakes in a new company, TikTok Global, that would oversee U.S. operations.
However, the two sides have made inconsistent statements on the corporate structure of TikTok Global. ByteDance said last week that it will still own 80 percent of the U.S. entity after a financing round. Oracle, meanwhile, put out a statement saying that Americans “will be the majority and ByteDance will have no ownership in TikTok Global.” Trump said Sept. 20 that he gave the in-principle deal his “blessing,” but later said he could retract his approval if Oracle doesn’t have “total control” of the company.
TikTok said it was pleased with the injunction and added that it would maintain its “ongoing dialogue with the government to turn our proposal, which the president gave his preliminary approval to last week, into an agreement.”
The Commerce Department responded to the ruling on Sept. 27, saying that it would comply but would continue to “vigorously defend” the executive order from legal challenges given that the president’s executive order is “fully consistent with the law and promotes legitimate national security interests.”
TikTok lawyer John Hall argued before Nichols on Sept. 27 that TikTok is more than an app, since it functions as a “modern day version of a town square.”
“If that prohibition goes into effect at midnight, the consequences immediately are grave,'” Hall said. “It would be no different than the government locking the doors to a public forum, roping off that town square” at a time when a free exchange of ideas is necessary heading into a polarized election.
Justice Department lawyer Daniel Schwei said Chinese companies aren’t purely private and are subject to intrusive laws compelling their cooperation with Chinese intelligence agencies. The Justice Department has also argued that economic regulations of this nature generally aren’t subject to First Amendment scrutiny.
“This is the most immediate national security threat,” Schwei argued. “It is a threat today. It is a risk today and therefore it deserves to be addressed today, even while other things are ongoing and playing out.”
Any deal between ByteDance and Oracle and Walmart would also require approval from the Committee on Foreign Investment in the United States, a governmental panel that reviews foreign acquisitions for national security risks. Meanwhile, ByteDance has said that Beijing would also need to sign off on any agreement, as the regime in August revised technology export controls in a way that gave it a say over the TikTok deal.
Last week, a federal judge in California temporarily blocked a similar order to ban Chinese messaging app WeChat that was set to take effect on Sept. 20. The Justice Department has asked the judge for the ban to be restored, with a hearing scheduled for Oct. 15.
The Associated Press contributed to this report.