Content creators in front of the US Supreme Court in Washington, where TikTok argued against a law that could ban the platform in the US. AP
Content creators in front of the US Supreme Court in Washington, where TikTok argued against a law that could ban the platform in the US. AP
Content creators in front of the US Supreme Court in Washington, where TikTok argued against a law that could ban the platform in the US. AP
Content creators in front of the US Supreme Court in Washington, where TikTok argued against a law that could ban the platform in the US. AP

TikTok fights for US survival at the Supreme Court


Cody Combs
  • English
  • Arabic

Incredibly popular but increasingly embattled social media platform TikTok made its case to the US Supreme Court on Friday in a last-gasp effort to fight a law that could essentially ban the app in the US on January 19.

Throughout most of the hearing, many of the court's nine justices appeared to be leaning towards upholding the law. Although litigators representing TikTok tried vigorously, they never seemed to make an argument that strongly resonated with any of the justices.

“Americans have a right to work with a foreign publisher,” Jeffrey Fisher, a lawyer making an argument on behalf of various TikTok content creators, told the Supreme Court. “This court recently said that this [social media] is the modern public square.”

He also insisted that the law passed by Congress that could ban TikTok would affect the free speech of millions of content creators, poking fun at the law's proponents who cite national security as a major factor justifying the law.

“Cat videos don't affect national security,” he said, before suggesting that if data security were really the main motivation behind the law, many US companies should have also been included.

Jeffrey Fisher, partner at O'Melveny & Myers and lawyer for TikTok content creators, departs after arguing before the US Supreme Court. AFP
Jeffrey Fisher, partner at O'Melveny & Myers and lawyer for TikTok content creators, departs after arguing before the US Supreme Court. AFP

“It's a weird law if you're looking at it from a data security standpoint, and maybe Congress can do better.”

Noel Francisco, the lawyer making TikTok and its parent company ByteDance's argument inside the Supreme Court, emphasised that the platform largely operates as a subsidiary in California, with data servers were operated in the US by Oracle.

He also claimed that because TikTok operates mostly on its own in the US, separate from China-owned ByteDance, the company should be protected under the First Amendment, which guarantees the right to free speech.

But Justice Neil Gorsuch seemed dismissive of that argument.

“Speech by a foreign government with enormous resources is not protected,” Mr Gorsuch told Mr Francisco. “Why should we entertain that notion, because of some convoluted corporate structure?”

Reporters are not allowed to carry phones, cameras or recording devices into the into US Supreme Court hearings, and the TikTok hearings were no different. Cody Combs / The National
Reporters are not allowed to carry phones, cameras or recording devices into the into US Supreme Court hearings, and the TikTok hearings were no different. Cody Combs / The National

Other justices also seemed to imply that TikTok's arguments about creator content free speech were a stretch, explaining that the new law deals mostly with concerns over US data privacy and national security.

“This isn't about what people are saying on TikTok,” said Chief Justice John Roberts. “This is about control over the data and the algorithm.”

US Solicitor General Elizabeth Prelogar argued on behalf of the Justice Department in support of the law.

“China can weaponise TikTok at any time,” she told the justices during her oral argument. “TikTok's data gives the People's Republic of China an unprecedented tool and an unprecedented amount of data that they would like to collect in the US.”

Mr Gorsuch made critiques of both the law and the Justice Department's argument.

“Isn't this sort of a paternalistic tone?” he asked Ms Prelogar, suggesting that ultimately many Americans use devices, businesses and services provided by China.

Justice Sonia Sotomayor echoed Mr Gorsuch's point.

“By now, it's quite established that China is behind it,” she said.

Ms Prelogar, however, suggested the sheer volume of content and data available to China justified concern.

How the ban ended up at the Supreme Court

Queues began forming outside the Supreme Court in Washington before the sun came up. Litigators from both sides also gathered outside, agreeing on one thing: the sub-zero temperatures made the wait to get inside all the more difficult.

Ultimately at the centre of this Supreme Court case is the Protecting Americans from Foreign Adversary Controlled Application Act, which sailed through Congress last year.

That act, which passed with bipartisan support and was later signed by President Joe Biden, sought to force ByteDance, the China-based company that owns TikTok, to sell the platform to a US owner, or risk being banned in the country.

People wait in line to view oral arguments in TikTok v Merrick Garland at the Supreme Court in Washington. EPA
People wait in line to view oral arguments in TikTok v Merrick Garland at the Supreme Court in Washington. EPA

ByteDance has long argued that technically, it is incorporated in the Cayman Islands. But sceptics note it is still subject to laws of the Chinese government, rendering its Cayman Islands argument largely moot.

Congress passed the law after years of worries that US user data could be compromised by China, creating a national security vulnerability in the US. India has also banned TikTok on similar grounds.

ByteDance, TikTok and the platform's chief executive Shou Zi Chew have repeatedly denied the claims made by US legislators.

During his first term in the White House, president-elect Donald Trump initially expressed concerns about US data security, but during his presidential campaign last year, he joined the platform, quickly drawing millions of followers. He later posted videos saying that only he could save TikTok if elected.

Mr Trump's team filed an argument to the court to allow him to negotiate a deal that would save the platform, though details on exactly how he would achieve the deal were lacking.

He has also told reporters in recent news conferences that he has a “soft spot” for the platform, and that he believes it helped him win over more young voters.

Ultimately, if the Supreme Court rules against TikTok, there will be very little Mr Trump can do to save the platform in the US.

Already, congressional leaders have sent letters to Apple, Google and Amazon, warning them about the forthcoming January 19 deadline and telling the technology companies to be prepared to remove TikTok from their respective app stores.

Some US investors and entrepreneurs have expressed interest in trying to acquire TikTok from ByteDance, but thus far, the company has insisted it will not sell the app.

It is not clear what any hypothetical new owners of TikTok would be buying, with many speculating that ByteDance would retain control of the mysterious algorithm that has become the envy of many media companies and social media platforms.

Some have said that essentially, purchasing TikTok would be akin to buying a bunch of usernames and email addresses, but others have disagreed and said purchasing the TikTok brand could prove to be a wise investment with so many young people having an affinity for the app.

Supreme Court decision: what happens now?

With arguments from both sides now made, the Supreme Court justices will now deliberate. There are several possibilities before them.

They could vote to simply find the law constitutional and uphold it, or they could decide to strike it down, giving TikTok a big win.

The justices could also decide to issue a stay or injunction, which would give ByteDance, legislators and even Mr Trump more time to try to work out a deal.

TikTok's lawyers suggested they would be open to adding disclaimers on the platform, while the Justice Department seemed to suggest that disclaimers would not remedy their concerns about the platform.

But the Justice Department has indicated that the law gives some wriggle room for the ban to be reversed if certain criteria, such as divestment, were met after the deadline.

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Will the pound fall to parity with the dollar?

The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.

Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.

New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.

“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.

The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.

The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.

Bloomberg

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Updated: January 11, 2025, 4:20 AM