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SOCIAL MEDIA

TikTok Fights For Its Life in High-Stakes Legal Showdown

Why we’re paying attention… Businesses now spend over $10 billion on TikTok ads each year and over $20 billion has changed hands on TikTok's Shop platform. But the fate of this multi-billion dollar marketplace has been at stake ever since the U.S. passed a bill that forces TikTok to divest by January 2025 or face a ban. Today marked the latest development in the case that could not only affect content creators and businesses who rely on the app, but many other apps that may also be targeted by global governments.

Today was a big day for TikTok in the United States.

In Washington, D.C., a federal appeals court heard crucial arguments that could decide whether TikTok stays or gets banned across the country.

On one side sat TikTok’s legal team and a number of content creators who rely on the platform to make a living.

On the other side sat representatives for the U.S. government.

The three judges who heard the case—and those who will decide where the case goes from here—were Sri Srinivasan, an Obama appointee; Neomi Rao, appointed by Trump; and Douglas Ginsburg, appointed by Reagan.

The case, which was supposed to be a one-hour session, turned into a two-hour legal back-and-forth.

Here’s how it went down…

🇺🇸 TikTok is a threat to national security

The U.S. government’s main argument is that TikTok poses a national security risk because its parent company, ByteDance, is based in China.

They worry that the Chinese government could pressure ByteDance to hand over user data or use the app to spread disinformation.

This, they argued, could put millions of Americans at risk without them even knowing.

🇨🇳 TikTok’s U.S. operations offer the U.S. control

TikTok’s lawyers pushed back, saying that most of the app’s operations and decision-making happen in the U.S.

They argued that having U.S.-based teams that manage content and algorithms reduces the risk of foreign interference.

They believe that the app’s American side keeps control over what happens on the platform.

🇺🇸 There’s still an unacceptable possibility of foreign influence

Despite TikTok’s claims, the U.S. government remains concerned.

They argued that even if TikTok operates in the U.S., ByteDance still holds enough power to potentially share data with China if pressured.

The government said this connection is a serious security issue, no matter where TikTok’s day-to-day decisions are made.

🇨🇳 There is no evidence of foreign influence or misuse

TikTok pointed out that there’s zero evidence showing that the Chinese government has misused American data.

They argued that the U.S. government’s fears are based on possibilities, not facts.

Since TikTok has been operating in the U.S. since 2017 without any proven misuse, they believe the security concerns are overblown.

🇺🇸 The best remedy is prevention

The government argued that it’s better to act before something bad happens.

They believe that waiting for actual misuse would be too late, so they want to take steps now to prevent any possible future risks.

Their stance is that prevention is key, even without current evidence of harm.

🇨🇳 A ban would restrict free speech

TikTok and its supporters pointed out that banning the app would violate the First Amendment, which protects free speech.

They say that millions of Americans use TikTok to express themselves, learn, and share information.

A ban would cut off this flow of communication and restrict users’ rights.

🇺🇸 National security > free speech

The government acknowledged these free speech concerns but insisted that national security must come first.

They argued that the potential threat from foreign influence outweighs the impact on speech.

In their view, protecting the country is more important, even if it means restricting what platforms people can access online.

🇨🇳 It would be a slippery slope and set a dangerous precedent

TikTok warned that targeting them because of their foreign ownership could set a dangerous precedent.

They argued that other foreign-owned platforms could face similar actions, even if they aren’t actually security threats.

This could create a slippery slope where companies are punished based simply on where they come from, not what they do.

🇺🇸 We’re not taking TikTok away from the American people, just from the Chinese government

To avoid an immediate ban, the U.S. government has suggested that TikTok must divest from ByteDance and find a new owner that isn’t Chinese within six months.

They believe this would solve the security issues by cutting the ties between TikTok and China while still allowing Americans to access TikTok.

🇨🇳 A divestiture is not technically possible and there are less extreme options

TikTok argued that separating from ByteDance is not as simple as it sounds.

They explained that their software and algorithms are deeply connected with ByteDance’s systems, making a split technically challenging.

That’s why TikTok and the U.S. government were pursuing Project Texas, where the data of U.S. users was going to be moved onto American servers owned by Oracle.

Plus, TikTok were willing to offer the U.S. a “killswitch” that gave them the ability to shut TikTok down if there were any violations.

🇺🇸 Project Texas ain’t good enough

In court documents, officials revealed they abandoned Project Texas because it wasn’t robust enough.

They maintain that it would be too difficult to actually detect any violations that TikTok commits.

The only way of taking the national security threat off the table is for TikTok to fully part ways with its parent company or be subjected to a nationwide ban.

🇨🇳 The illusion of choice

TikTok suggested that the ultimatum imposed on it by the U.S. leaves them with no real choice.

The stated position of the Chinese Communist Party is that the TikTok algorithm is a “secret sauce” that is too valuable to hand over—therefore a divestiture is off the table.

⚖️ Judges will now weigh both sides

The judges now have the difficult task of balancing the U.S. government’s national security concerns with TikTok’s arguments about free speech and fair treatment.

Their decision will shape the future of TikTok in the U.S. and set important precedents for how foreign-owned apps are regulated.

SNIPPETS

Former Ticketmaster exec sentenced for hacking rival. When Stephen Mead left his executive role at the ticket sales company CrowdSurge in 2012, he signed a separation agreement that barred him from sharing any confidential information. One year later, Mead joined CrowdSurge’s competitor Ticketmaster and, well, began sharing a lot of confidential information. Court documents revealed that CrowdSurge’s computer servers were accessed 25 times via IP addresses registered to Ticketmaster, 85,000 CrowdSurge documents were found on Mead’s computer including business plans, client lists, and contracts, plus (if all that wasn’t enough) Mead is on record giving Ticketmaster employees confidential usernames and passwords and encouraging them to “screengrab the hell out of the system.” Mead was sentenced to one year’s supervised release and ordered to pay a $67,970 fine for his betrayal. We guess those annual data security and ethics seminars might be worth paying attention to after all.

Former Twitter Director wins unfair dismissal case against Musk. During Elon Musk's Twitter takeover, he sent an email to new employees demanding they click a link to confirm their commitment to “Twitter 2.0” or be deemed resigned. Jools Rooney, a Dublin-based director, did not click the link, believing the email was spam. Twitter treated his silence as voluntary resignation and access to his work accounts were instantly revoked. Rooney took this up with Ireland’s Workplace Relations Commission and they found that the 24-hour notice period was undeniably unreasonable and awarded Rooney €550,131 ($607,802) for unfair dismissal. This could embolden other X employees who were suddenly dismissed to pursue legal action. 

Trump ordered to pay $300,000 for using song without permission. A Manhattan judge ruled that Donald Trump's use of Eddy Grant's "Electric Avenue" in a 2020 campaign video was a violation of copyright law. The court argued that allowing uncompensated use of Grant's music in political videos would encourage future infringers and harm the artist's ability to license his work. Trump must pay $300,000 in compensation plus additional legal fees Grant incurred during four years of litigation. This ruling could impact the outcomes of other ongoing copyright infringement cases against the former President including a newly filed lawsuit by The White Stripes over the use of their 2003 song Seven Nation Army in a campaign interview. 

Snapchat faces lawsuit in New Mexico over failure to protect young users. Snapchat is being sued by the U.S. state of New Mexico for allegedly fostering child sexual abuse and facilitating child sextortion. The lawsuit accuses Snapchat of misleading users into believing that photos and videos sent through the platform would disappear, while in reality, it's easy for predators to permanently capture and misuse this content. The result has been the creation of a virtual "yearbook" of child sexual images that are traded, sold, and stored indefinitely. The New Mexico Department of Justice has uncovered a significant network on the dark web dedicated to sharing stolen, non-consensual sexual images from Snapchat, with over 10,000 records related to Snapchat and child sexual abuse material (CSAM) discovered in 2023 alone. It has been identified as the preferred platform for criminals seeking to exploit children for sextortion or CSAM. Earlier this year, New Mexico successfully sued Meta for similar reasons, alleging inadequate protection of younger users. The state hopes to mandate a more robust form of identity verification on the app and to block Snapchat from making any further claims that it is a safe platform for children in its marketing materials. 

23andMe settles data breach lawsuit for $30 million. On September 13th, the DNA testing company agreed to resolve claims stemming from a 2023 hack that exposed sensitive genetic information of 6.9 million customers. The data leak primarily affected users of Ashkenazi Jewish descent (1,000,000+) and users of Chinese heritage (100,000+) and their genetic information was among the first to be offered for sale on the dark web. Class members may receive up to $10,000 in reimbursement for verifiable losses such as identity fraud or mental health treatment linked to the breach. All affected customers will also receive three years of free Privacy & Medical Shield monitoring, offering protections against further misuse of their data. 23andMe has already lost tens of millions of dollars in revenue as a result of the hack, but the company may find some comfort from their cyber insurance policy that is expected to cover $25 million of this latest $30 million legal bill.

Court rules against Internet Archive's digital library. During the peak of Covid-19, the Internet Archive initiated the “National Emergency Library” project. This allowed an unlimited number of people to access books or articles the library owned. Previously, the Internet Archive could lend out digital copies of books on a one-to-one basis, meaning they could only lend as many digital copies as they physically owned. However, four of the world’s largest publishers—Hachette, HarperCollins, Penguin Random House and Wiley—protested the new arrangement, arguing that it infringed on their copyright protections. On September 4th, the New York second circuit court ruled in favor of the publishers on the grounds the project caused them market harm. Specifically, they found that allowing up to 10,000 users at once to access each book deprives authors of compensation and diminishes the incentive for them to produce new works. The ruling led to the immediate removal of over 500,000 books although the Internet Archive has expressed disappointment with the outcome and has said it remains committed to defending the rights of libraries to lend books.

MEME

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The answer to today’s “did you know” is…

False. There is no law in the UK that criminalizes dying in the House of Commons; this is an urban legend. Although it might be seen as disrespectful or disruptive, there are no legal penalties for passing away in that location.

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