ByteDance challenges Trump's order

NEW YORK/WASHINGTON－ByteDance, the Chinese parent company of video-sharing app Tik-Tok, filed a petition on Tuesday with a US Appeals Court challenging an order by the administration of President Donald Trump requiring it to divest from TikTok. It was set to take effect on Thursday.

Trump, in an Aug 14 order, directed ByteDance to divest the app within 90 days. The Trump administration contends TikTok poses national security concerns as the personal data of US users could be obtained by China's government.

TikTok, which has more than 100 million users in the United States, denies the allegations.

In the petition filed with the US Court of Appeals for the District of Columbia, ByteDance said it is seeking a court review of the divestment order, claiming the order and a finding by a US agency that TikTok represented a security threat were unlawful and violated rights under the US Constitution.

ByteDance, which has been in talks for a deal with Walmart and Oracle to shift TikTok's US assets into a new entity, also said it is requesting a 30-day extension of the order so it can finalize terms of the deal.

"Facing continual new requests and no clarity on whether our proposed solutions would be accepted, we requested the 30-day extension that is expressly permitted in the Aug 14 order," TikTok said in a statement.

"Without an extension in hand, we have no choice but to file a petition in court to defend our rights," the company said.

The White House and Treasury declined to comment.

In September, TikTok announced it had a preliminary deal for Walmart and Oracle to take stakes in a new company to oversee US operations. Trump has said the deal had his "blessing".

Ownership structure

One big issue that has persisted is over the ownership structure of the new company, TikTok Global, that would own TikTok's US assets.

In its court filing, ByteDance said it submitted a fourth proposal on Friday that contemplated addressing US concerns "by creating a new entity, wholly owned by Oracle, Walmart and existing US investors in ByteDance, that would be responsible for handling Tik-Tok's US user data and content moderation".

ByteDance said it plans to file a request "to stay enforcement of the divestment order only if discussions reach an impasse and the government indicates an intent to take action to enforce the order".

The petition names Trump, Attorney General William Barr, Treasury Secretary Steven Mnuchin and the Committee on Foreign Investment in the United States, or CFIUS, the interagency panel that reviews transactions involving foreign investment on national security concerns.

It says the CFIUS action and Trump order "seek to compel the wholesale divestment of TikTok, a multibillion-dollar business built on technology developed by" Byte-Dance "based on the government's purported national security review of a three-year-old transaction that involved a different business".

A source told Reuters that the CFIUS stopped responding to Byte-Dance soon after Trump's last public TikTok comments on Sept 19.

Separate restrictions on TikTok from the US Commerce Department have been blocked by federal courts, including restrictions on transactions that were scheduled to take effect on Thursday that TikTok warned could effectively ban the app's use in the US.

A Commerce Department ban on Apple and Alphabet's Google offering TikTok for download for new US users set to take effect on Sept 27 has also been blocked.

Agencies Via Xinhua