TikTok Sale Order: ByteDance Appeals to Federal Court

ByteDance, the parent organization of TikTok, has submitted a new request to the federal appeals court seeking the cancellation of the U.S. government’s directive compelling the sale of its American operations.

In August, President Donald Trump issued an order mandating ByteDance to divest TikTok’s U.S. assets by November 12, unless a 30-day extension was approved by the Committee on Foreign Investment in the United States (CFIUS). According to the recent filing (detailed below) with the federal appeals court in Washington, D.C., ByteDance communicated its request for an extension to the CFIUS on November 6, but this extension has not yet been granted.

The company further stated its continued dedication to “achieving a mutually acceptable resolution with CFIUS that addresses its national security considerations” and indicated it will only pursue a motion to halt the enforcement of the divestiture order “should negotiations fail to produce an agreement.”

The executive order signed by Trump in August, which prohibited transactions with ByteDance, whose headquarters are in Beijing, stemmed from security apprehensions regarding TikTok’s Chinese ownership.

The executive order asserted that TikTok presented a risk to national security, a claim ByteDance disputes. However, to avert a potential ban of the application, which boasts approximately 100 million users within the U.S., ByteDance reached an agreement in September to transfer a 20% ownership stake in TikTok to Oracle and Walmart. With the Biden administration’s inauguration scheduled for January and ByteDance’s ongoing legal challenge to the divestment order, the status of this arrangement is currently unclear.

This new filing is connected to a lawsuit TikTok initiated against the Trump administration on September 18. The company initially secured a legal win when the court prevented the U.S. government’s ban from taking effect on its original deadline that month.

A TikTok representative conveyed in a statement sent to TechCrunch that the company has been collaborating with the CFIUS for a year to resolve its national security concerns “despite our disagreement with their evaluation.”

“Given the constant stream of additional requests and a lack of confirmation regarding the acceptability of our proposed solutions, we formally requested the 30-day extension explicitly allowed within the August 14 order,” the statement explained.

“Today, as the November 12 CFIUS deadline approaches without an extension being issued, we are left with no alternative but to submit a petition to the court to protect our rights and the interests of our more than 1,500 U.S.-based employees.” 

TikTok asks U.S. federal appeals court to vacate U.S. divestment order by TechCrunch on Scribd