TikTok may shut down on Sunday in the US if China does not agree to sell to a US owner. Musk to the rescue?
Hello US TikTok users, the Supreme Court Upholds TikTok Shutdown
The Supreme Court unanimously upheld a federal law requiring TikTok’s Chinese owners to sell or shut down the social-media app by Jan. 19, siding with Congress’s national-security concerns over the platform and its users’ claim that the ban violates the First Amendment.
The ruling on Friday means the platform could go dark—at least temporarily—on Sunday, depriving millions of teenagers and other TikTok users of their daily fix of short-form videos that keep them glued to their phones.
President-elect Donald Trump and his allies are trying to find a political path forward to assuage security concerns and rescue the app. Biden administration officials have signaled they don’t intend to enforce the ban before leaving office, but that hasn’t been enough to give TikTok comfort.
TikTok, girding for a possible loss at the Supreme Court, has been planning to shut down the app in the U.S. to comply with the law and avoid exposing companies that sell or distribute the app to legal liability. It has also been exploring other maneuvers and courting Trump.
The ruling set off a new last-minute round of scrambling. The White House made clear it intended to take no action when the law takes effect Sunday, given Trump’s inauguration the next day. “This administration recognizes that actions to implement the law simply must fall to the next administration,” press secretary Karine Jean-Pierre said.
The Justice Department said it welcomed the decision but offered no specifics on what happens now. “The next phase of this effort—implementing and ensuring compliance with the law after it goes into effect on January 19—will be a process that plays out over time,” Deputy Attorney General Lisa Monaco said.
Trump in a social-media post said, “My decision on TikTok will be made in the not too distant future, but I must have time to review the situation. Stay tuned!”
27-Page Decision
Here is a link to the Supreme Court Decision.
As of January 19, the Protecting Americans from Foreign Adversary Controlled Applications Act will make it unlawful for companies in the United States to provide services to distribute, maintain, or update the social media platform TikTok, unless U. S. operation of the platform is severed from Chinese control. Petitioners are two TikTok operating entities and a group of U. S. TikTok users.
We consider whether the Act, as applied to petitioners, violates the First Amendment. In doing so, we are conscious that the cases before us involve new technologies with transformative capabilities. This challenging new context counsels caution on our part.
In August 2020, President Trump issued an Executive Order finding that “the spread in the United States of mobile applications developed and owned by companies in [China] continues to threaten the national security, foreign policy, and economy of the United States.”
Just days after issuing his initial Executive Order, President Trump ordered ByteDance Ltd. to divest all interests and rights in any property “used to enable or support ByteDance’s operation of the TikTok application in the United States,” along with “any data obtained or derived from” U. S. TikTok users.
Against this backdrop, Congress enacted the Protecting Americans from Foreign Adversary Controlled Applications Act. Pub. L. 118–50, div. H, 138 Stat. 955. The Act makes it unlawful for any entity to provide certain services to “distribute, maintain, or update” a “foreign adversary controlled application” in the United states.
Petitioners argue that such a ban will burden various First Amendment activities, including content moderation, content generation, access to a distinct medium for expression, association with another speaker or preferred editor, and receipt of information and ideas.
“Content-based laws—those that target speech based on its communicative content—are presumptively unconstitutional and may be justified only if the government proves that they are narrowly tailored to serve compelling state interests.”
Content-neutral laws, in contrast, “are subject to an intermediate level of scrutiny because in most cases they pose a less substantial risk of excising certain ideas or viewpoints from the public dialogue.” Turner I, 512 U. S., at 642. Under that standard, we will sustain a content-neutral law “if it advances important governmental interests unrelated to the suppression of free speech and does not burden substantially more speech than necessary to further those interests.”
The Act’s prohibitions and divestiture requirement are designed to prevent China—a designated foreign adversary—from leveraging its control over ByteDance Ltd. to capture the personal data of U. S. TikTok users. This objective qualifies as an important Government interest under intermediate scrutiny. Petitioners do not dispute that the Government has an important and well-grounded interest in preventing China from collecting the personal data of tens of millions of U. S. TikTok users. Nor could they. The platform collects extensive personal information from and about its users.
Rather than meaningfully dispute the scope of the data TikTok collects or the ends to which it may be used, petitioners contest probability, asserting that it is “unlikely” that China would “compel TikTok to turn over user data for intelligence-gathering purposes, since China has more effective and efficient means of obtaining relevant information.”
According to the Government, ByteDance Ltd. has previously declined to agree to stop collecting U. S. user data or sending that data to China to train the algorithm. See 2 App. 705–706. The Government has further noted the difficulties associated with monitoring data sharing between ByteDance Ltd. and TikTok Inc. See id., at 692–697. Under these circumstances, we find the Government’s data collection justification sufficient to sustain the challenged provisions.
Supreme Court Conclusion
There is no doubt that, for more than 170 million Americans, TikTok offers a distinctive and expansive outlet for expression, means of engagement, and source of community.
But Congress has determined that divestiture is necessary to address its well-supported national security concerns regarding TikTok’s data collection practices and relationship with a foreign adversary. For the foregoing reasons, we conclude that the challenged provisions do not violate petitioners’ First Amendment rights. The judgment of the United States Court of Appeals for the District of Columbia Circuit is affirmed.
Agree and Disagree
The Supreme Court ruling is rock solid. However, I disagree with the premise of the law.
I do not believe TikTok is a national security threat. But my opinions don’t matter.
Ironically, it was Trump who started the march down this path with his executive order, now morphed into national law. Now it is unclear if Trump even believes in his executive order.
Unless there is a buyer already on deck waiting for this ruling to make a move, there will at least be a temporary shutdown of TikTok starting Sunday, January 19.
Speculation Musk Could Buy TikTok
Yahoo!Finance reports Tesla stock jumps amid speculation Musk could buy TikTok
Tesla (TSLA) stock jumped 3% Friday amid speculation that CEO Elon Musk could potentially buy TikTok. The social media platform needs to find an American buyer, or it will effectively face a countrywide ban starting next week — and Musk is reportedly the most likely candidate.
“We believe ByteDance and ultimately Beijing is looking at the possibility that Musk/X could buy the US TikTok operations,” wrote Wedbush analyst Dan Ives in a note to investors. “Beijing/Xi Jinping has a strong relationship with Musk so there would be added comfort in this deal/potential partnership to avoid a TikTok ban in our view.”
Even before Ives tossed his thoughts into the mix, Bloomberg this week reported that Chinese officials were exploring such an option, citing unnamed sources. Bloomberg’s sources said Beijing preferred TikTok remain under ByteDance rather than selling it to Musk. TikTok denied the claim, calling the report “pure fiction.”
In the meantime, Trump has vowed to “save” the app. Trump has several avenues of action he could take to fend off a TikTok ban. For example, he could push Congress to repeal the ban or extend the deadline for the TikTok sale.
“We continue to believe Musk will be heavily involved in finding a solution for TikTok and ultimately could build a consortium to buy TikTok,” Ives wrote, believing its price tag to be in the $40 billion to $50 billion range.
If Musk does by TikTok, I suspect he would eventually merge it into X bringing more eyes into the total mix.
But I am unsure if China is willing or what the price might be (other than very high).
Regardless, the irony remains that it was Trump who set this ban in motion and now appears to not like the result.