Publish date:

TikTok Sues Trump Administration Over Executive Order

TikTok argues that the Trump Administration's recent executive order to ban transactions by U.S. companies with TikTok is illegal.

TikTok filed a lawsuit in federal court accusing the Trump Administration of ignoring due process in its recent executive order threatening to ban transactions with TikTok by U.S. companies. 

The lawsuit was filed in Federal District Court for the Central District of California, and accuses the administration of abusing the International Emergency Economic Powers Act (IEEPA), which can be invoked to ban activities that present an "an unusual and extraordinary threat," to harm TikTok, which is owned by China-based Bytedance. 

"The Executive Order issued by the Administration on August 6, 2020 has the potential to strip the rights of [the TikTok community] without any evidence to justify such an extreme action, and without any due process," TikTok wrote in a blog post. "We strongly disagree with the Administration's position that TikTok is a national security threat and we have articulated these objections previously."

TikTok also accuses the White House of failing to engage with good faith the company's efforts to demonstrate its commitment to the U.S. market, and various security measures taken to safeguard the data of its roughly 100 million U.S. users. 

Under the president's executive order, which cited national security reasons, “any transaction” between a U.S. citizen and TikTok's Beijing-based parent company will be outlawed in 45 days. The order was then extended to 90 days, setting a deadline of November 12th.

TheStreet Recommends

TikTok officials see the order as essentially a pressure campaign, with the goal of forcing an American company to move quickly to acquire the app's U.S. assets. 

Microsoft  (MSFT) - Get Microsoft Corporation (MSFT) Report says it is in negotiations to potentially acquire TikTok; Oracle  (ORCL) - Get Oracle Corporation Report is also reportedly interested in bidding. Shortly after the order was issued, Trump said that the U.S. government should receive a “very big proportion” of the sale price for TikTok's assets.

In the filing, TikTok's attorneys argued that the company provided "voluminous documentation to the U.S. government documenting TikTok's security practices and made commitments that were more than sufficient to address any conceivable U.S. government privacy or national security concerns." 

The filing also noted that the "President's demands for payments have no relationship to any conceivable national security concern," and only underscore the lack of due process undertaken by the Trump administration.

Microsoft is a holding in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells MSFT? Learn more now.