The potential ban could strain US-China relations just as president-elect Donald Trump prepares to take office on January 20.
The US government alleges TikTok allows Beijing to collect data and spy on users. It also says TikTok is a conduit to spread propaganda, though China and app owner ByteDance strongly deny these claims.
But Trump has emerged as an unlikely ally, arguing that a ban would mainly benefit Meta’s platforms owned by Mark Zuckerberg.
The law, signed by President Joe Biden in April, would block TikTok from US app stores and web hosting services unless ByteDance sells the platform by January 19.
The case is now likely to go to the US Supreme Court.
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In Friday’s legal ruling, a three-judge panel rejected TikTok’s main arguments that the US security concerns justifying the law were speculative.They also disagreed that less drastic alternatives than a sale by ByteDance would solve the issues raised by the US government.
The judges also rejected the notion put forward by TikTok that the law was really about censoring content rather than security.
“This conclusion is supported by ample evidence that the Act is the least restrictive means of advancing the Government’s compelling national security interests,” the judges said in their opinion.
Trump’s stance reflects broader conservative criticism of Meta for allegedly suppressing right-wing content, including Trump’s ban from Facebook after the January 6, 2021 Capitol riot.
It marks a reversal from Trump’s first term, when he tried to ban TikTok over similar security concerns.
That effort got bogged down in the courts when a federal judge questioned how the move would affect free speech and blocked the initiative.
Trump’s newly nominated tech policy czar David Sacks also opposes the ban as government overreach.
Trump’s shift coincides with his connection to Jeff Yass, a major Republican donor with ByteDance investments.
The President-elect launched his own TikTok account in June, gaining 14.6 million followers, but hasn’t posted since Election Day.
The Wall Street Journal reported that Tiktok CEO Shou Zi Chew has sought support from Elon Musk, who has close ties with Trump.
Despite the uncertainty, TikTok’s US presence continues growing.
The platform reported $100 million in Black Friday sales for its new shopping venture, and Emarketer projects US ad revenue will reach $15.5 billion next year, accounting for 4.5 percent of total digital ad spending in the country.
Emarketer lead Analyst Jasmine Enberg warned a ban would significantly disrupt the social media landscape, benefiting Meta, YouTube, and Snap while harming content creators and small businesses dependent on TikTok.
