TikTok Sues Trump Administration Over Ban, Criticizes CFIUS Review Process

TikTok, the video-sharing application owned by China-based ByteDance, sued the Trump administration for banning U.S. transactions with the company (see 2008070024), saying the administration’s decision was heavily politicized and lacked due process. TikTok also said it was the subject of a non-transparent review by the Committee on Foreign Investment in the U.S., and called the administration’s ban a “misuse” of the International Emergency Economic Powers Act.

TikTok heavily criticized the administration’s ban, which it said punishes the app “without any evidence to justify such an extreme action,” and detailed what it said was an unfair experience with CFIUS. The committee “repeatedly refused to engage with ByteDance and its counsel about CFIUS’s concerns,” TikTok said in an Aug, 24 statement about its suit.

TikTok said ByteDance was contacted by CFIUS in 2019 about ByteDance’s 2017 acquisition of Musical.ly and provided “voluminous documentation and information” in response to CFIUS’s questions. TikTok said ByteDance submitted “detailed documentation” about TikTok’s security measures that ensure the app’s U.S. user data is safeguarded and “cannot be accessed by unauthorized persons,” including the Chinese government.

But CFIUS ruled that Musical.ly acquisition and related transactions presented national security risks and did not identify “mitigation measures” to address the risks, TikTok said. “CFIUS never articulated any reason why TikTok’s security measures were inadequate to address any national security concerns,” the company said, adding that the committee “rushed out its decision” and did not abide by the “standard communication appropriate in a CFIUS case.” The Treasury Department, which chairs CFIUS, did not comment.

TikTok also said President Donald Trump’s Aug. 6 executive order banning transactions with its parent company violated due process and does not qualify for IEEPA because it is “not rooted in bona fide national security concerns.” The order “authorizes the prohibition of activities that have not been found to be ‘an unusual and extraordinary threat,’ as required” by IEEPA, TikTok said. The White House did not comment.