TikTok Rivals Seek to Exploit U.S. Action, Lawyers Say in Court Filings

(WSJ) The Trump administration’s attempted ban on Chinese-owned TikTok threatens to devastate the video-sharing app’s user base and competitive position, lawyers for the company argued Wednesday.

“Competitors have already taken advantage of the government’s highly-publicized intention to shut down the app to entice TikTok creators and users to switch platforms,” lawyers for TikTok Inc. said in a filing to U.S. District Judge Carl Nichols.

TikTok made their statements in a request for Judge Nichols to stop the U.S. government from imposing measures that would essentially force a shutdown of TikTok’s U.S. operations Nov. 12 by barring companies from providing it internet hosting, content delivery and other services.

The federal government is expected to file its arguments by Oct. 23, and oral arguments are set for Nov. 4.

TikTok has an estimated 50 million daily active users in the U.S., but President Trump moved to ban the app on grounds that Chinese owner ByteDance Ltd. could share information on its users with China’s government. TikTok disputes that it would ever do so.

TikTok contends that the U.S. government’s attempted ban is illegal and violates constitutionally protected free speech rights. If the U.S. blocks Americans from using the app, even temporarily, “there would be permanent, devastating harm to TikTok’s user base and competitive position,” TikTok lawyers said in their court-filed request.

While TikTok and ByteDance are fighting the ban in the district court for Washington, D.C., they are also trying to rescue the app’s U.S. operations by negotiating a deal involving Oracle Corp. and Walmart Inc. 

The Committee on Foreign Investment in the U.S., which reviews the security implications of business deals involving foreign entities, is examining the proposed security safeguards for U.S. TikTok users.

Appearing on Fox Business Network on Wednesday, Treasury Secretary Steven Mnuchin indicated that the proposed new company, TikTok Global, must provide assurances that the data of U.S. consumers is secure.

“We negotiated what we think is a very good deal to turn this into an American company,” Mr. Mnuchin said. “There are going to be two outcomes: This will either be a safe American company or it will be shut down.”

Judge Nichols, who was nominated by Mr. Trump last year, has already handed TikTok one courtroom win when he agreed last month to grant a preliminary injunction to stop the Trump administration from banning new downloads ahead of the planned Nov. 12 shutdown.

The Commerce Department, which is in charge of implementing the ban, has proposed additional restrictions to take place on Nov. 12.

The Trump administration has struggled to make progress on stopping Americans from using Chinese-owned apps. Last month, a California judge halted a similar ban on popular messaging app WeChat after a group of the app’s users sued.

For TikTok, the company’s request on Wednesday marks the second effort unfolding in the courts to stop the Nov. 12 restrictions.

On Tuesday, several TikTok stars asked a Pennsylvania judge to stop the ban from taking effect, arguing that the move would cut off the stream of money they get from promotional and branding work.

In court papers, lawyers for the three stars—comedian Douglas Marland, fashion guru Cosette Rinab and musician Alex Chambers—said they have tried but failed to draw followers on platforms other than TikTok.

Mr. Marland, a Pennsylvania resident with about 2.7 million TikTok followers, said he earns about $5,000 to $7,000 each month—his only source of income to pay for rent and other living expenses, according to court papers.

Source: Wall Street Journal by Katy Stech Ferek

TikTok Rivals Seek to Exploit U.S. Action, Lawyers Say in Court Filings TikTok Rivals Seek to Exploit U.S. Action, Lawyers Say in Court Filings Reviewed by TechCO on 10/16/2020 Rating: 5

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