September 29, 2020 | technology | No Comments
(Bloomberg) — Two federal judges have ruled this month that the Trump administration failed to prove Chinese-owned apps used by millions of Americans pose enough of a national security threat to justify a U.S. ban.
U.S. District Judge Carl Nichols in Washington said in a court filing Monday that he blocked a ban on new downloads of ByteDance Ltd.’s TikTok because the government has likely overstepped its authority under the emergency-powers law it invoked to justify the prohibition. On Sept. 19, U.S. Magistrate Judge Laurel Beeler in San Francisco blocked a similar ban on Tencent Holding Ltd.’s WeChat.
The court decisions show that, while judges may agree with the notion that China poses a threat, the administration hasn’t yet shown that the apps themselves are a problem. It’s at least a temporary setback for President Donald Trump, who has argued that the Chinese owners of TikTok and WeChat are collecting personal data on Americans.
Nichols acknowledged in his ruling that the U.S. provided “ample evidence” that China is a risk to national security, but said the government’s evidence of the threat posed by TikTok “remains less substantial.”
Beeler reached a similar conclusion. “While the government has established that China’s activities raise significant national security concerns — it has put in scant little evidence that its effective ban of WeChat for all U.S. users addresses those concerns,” she said in her Sept. 19 order.
Both companies sued to delay the bans and then asked judges for more time to resolve the disputes.
In the WeChat case, the U.S. government said in a court filing it will submit classified information to support its request that Beeler lift her injunction blocking the ban. The Trump administration has yet to make a similar filing in the TikTok case, where Nichols on Sunday blocked a ban that was set to go into effect at midnight.
TikTok’s Chinese owner would likely succeed in proving the Trump administration exceeded its legal authority, Nichols said in his ruling.
The emergency powers invoked by Trump don’t allow him to prohibit “information materials and personal communications,” given that TikTok is used mostly to share videos, photographs, art and news, the judge said. And it is “not plausible” that any of that content would fall under the nation’s Espionage Act, he said.
The judge’s reasoning for his Sunday ruling remained sealed until Monday because some of the government’s filings in the case contained confidential business information.
While Nichols granted a preliminary injunction against the ban on new downloads, he declined to halt a separate set of prohibitions scheduled for Nov. 12, which are designed to further curb the app’s use unless the company finds a U.S. buyer for the assets.
The download ban would have removed TikTok from stores run by Apple Inc. and Google’s Android, the most widely used marketplaces for apps. People who didn’t yet have the app wouldn’t have been able to get it, and those who already had it wouldn’t have had access to updates needed to ensure its safe and smooth operation. TikTok has been downloaded by more than 100 million Americans.
In his opinion, Nichols said the ban would have done “irreparable harm” to TikTok, which has been growing at a rate of 424,000 new users a day in the U.S. “Barring TikTok from U.S. app stores would, of course, have the immediate and direct effect of halting the influx of new users, likely driving those users to alternative platforms and eroding TikTok’s competitive position,” Nichols wrote.
The Nichols ruling provided a reprieve for TikTok, but it is not the end of the legal battle. TikTok still faces a Nov. 12 deadline to agree on a deal to sell its U.S. business to an American buyer, or face the next set of prohibitions.
ByteDance is seeking government clearance to sell a stake of its U.S. business to Oracle Corp. and Walmart Inc. But while Trump has said he’s given the deal his “blessing,” the proposal requires formal approval from a government panel that oversees foreign investment in the U.S.
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