TikTok’s parent company ByteDance has asked a federal appeals court to vacate the Trump administration’s order asking it to divest its operations in the U.S., according to a petition filed by the company on Tuesday just two days before the government’s order goes into effect.
In its petition, Beijing-based ByteDance has asked for a review of the divestment order, claiming the order and the government’s assertion that TikTok is a national security threat were unlawful and violated the company’s rights under the U.S. Constitution.
As per President Donald Trump’s executive order, signed in August, ByteDance was required to divest TikTok’s U.S. operations by November 12, unless it was given a 30-day extension by the Committee on Foreign Investment in the United States (CFIUS).
The company claims that it had sought such an extension from the CFIUS on November 6, but the order hasn’t been granted yet.
The company, which had agreed to sell a 20% stake in TikTok to Oracle and Walmart in September, said that it is seeking the 30-day extension to finalize the deal.
According to a CNBC report, TikTok hasn’t had a “meaningful dialogue” with the CFIUS for weeks, and the company is still interested in completing its deal with Oracle even if the incoming Biden administration doesn’t force them to do so.
A technology advisor to Biden’s transition team told CNBC it was “too early to say” Biden’s view on TikTok, but the campaign had asked its staffers to delete the app off their personal devices due to security concerns in July.
Crucial Quote
In a statement shared with the media, TikTok said that it had “actively engaged with CFIUS in good faith to address its national security concerns, even as we disagree with its assessment.”
The company added: “In the nearly two months since the President gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalize that agreement – but have received no substantive feedback on our extensive data privacy and security framework.”
Key background
In September, ByteDance announced that Oracle and Walmart had agreed to acquire a 20% stake in the newly spun-off TikTok Global as part of a pre-IPO financing round.
At first, Trump signaled his support for such a deal, telling the press that he had given it his “blessing.” As part of this deal, Oracle would acquire 12.5% of the video-sharing platform, while Walmart agreed to hold a 7.5% stake.
But this arrangement quickly seemed to fall apart, first with Trump stating that ByteDance will “have nothing to do with” TikTok Global “and if they do, we just won’t make the deal.”
The president also insisted that the deal would only be approved if Oracle has “total control,” something ByteDance itself had strongly refuted, claiming that it would remain in control.
Oracle executive vice president Ken Glueck echoed Trump’s claims in a statement shared with Forbes in which he said: “Americans will be the majority and ByteDance will have no ownership in TikTok Global,” without offering any additional details.
In September, the Trump administration ordered the removal of the TikTok app from smartphone app stores while it was negotiating its deal. A judge, however, overruled this order, stating that Trump’s attempt to ban the app likely overstepped legal authority.
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