TIKTOK INC. and Bytedance Ltd., Petitioners v. Merrick B. GARLAND
Ginsburg, Senior Circuit Judge:
On April 24, 2024 the President signed the Protecting Americans from Foreign Adversary Controlled Applications Act into law. Pub. L. No. 118-50, div. H. The Act identifies the People’s Republic of China (PRC) and three other countries as foreign adversaries of the United States and prohibits the distribution or maintenance of “foreign adversary controlled applications.” Its prohibitions will take effect on January 19, 2025 with respect to the TikTok platform.
Three petitions — filed by ByteDance Ltd. and TikTok, Inc.; Based Politics, Inc.; and a group of individuals (“Creators”) who use the TikTok platform — which we have consolidated, all present constitutional challenges to the Act. We conclude the portions of the Act the petitioners have standing to challenge, that is the provisions concerning TikTok and its related entities, survive constitutional scrutiny. We therefore deny the petitions.
I. Background
This court has original and exclusive jurisdiction over this case pursuant to Section 3 of the Act. The parties have submitted several evidentiary appendices in support of their positions, including sworn declarations from various experts. In reviewing this material, we consider whether there is a genuine dispute as to any material fact. No dispute of essential facts stands in the way of our deciding this case on the merits of the parties’ legal arguments.
A. The TikTok Platform
TikTok is a social-media platform that lets users create, upload, and watch short video clips overlaid with text, voice-overs, and music. For each individual viewer, the platform creates a continuous sequence of videos based upon that user’s behavior and several other factors, with the aim of keeping that user engaged. The TikTok platform has approximately 170 million monthly users in the United States and more than one billion users worldwide.
What a TikTok user sees on the platform is determined by a recommendation engine, company content moderation decisions, and video promotion and filtering decisions. The recommendation engine is an algorithm that displays videos based upon content metadata and user behavior. It identifies a pool of candidate videos for a user, then scores and ranks those videos using machine-learning models designed to determine which video(s) would be most appealing to the user. The source code for the engine was originally developed by ByteDance, a company based in China that is the ultimate parent of TikTok.
Content moderation decisions involve a combination of machine and human actions. According to TikTok every video on the TikTok platform goes through “automated moderation” and if deemed potentially problematic is sent to a human moderator for review.
Video promotion (also called “heating”) and demotion (also called “filtering”) decisions are used to advance TikTok’s commercial or other goals. These decisions involve promoting or limiting specific videos on the platform. According to TikTok, each video that is promoted is first reviewed by a human. With respect to filtering, the platform follows a set of rules to disperse certain content.
B. The Petitioners
Three groups of petitioners challenge the Act on constitutional grounds: ByteDance Ltd. and TikTok, Inc.; Based Politics, Inc.; and the self-styled Creators, eight individuals who use the TikTok platform. We refer to the latter two groups collectively as the User Petitioners. Where the corporate structure of ByteDance affects our analysis, we identify the relevant corporate entity by name. Otherwise, we refer generally to ByteDance entities as TikTok. Because PRC control of the TikTok platform is central to this case, we provide the following overview.
ByteDance Ltd., the ultimate parent company of TikTok, is incorporated in the Cayman Islands. The Government characterizes ByteDance as headquartered in China and ByteDance acknowledges that it has significant operations there. It provides more than a dozen products through various operating subsidiaries, including Douyin, which is the counterpart to TikTok in China.
TikTok Ltd. is a wholly owned subsidiary of ByteDance and is incorporated abroad. TikTok Ltd. operates the TikTok platform globally, except in China. TikTok Ltd. wholly owns TikTok LLC, which in turn wholly owns TikTok, Inc., a California corporation that provides the TikTok platform to users in the United States. TikTok’s declarants describe the TikTok platform as highly integrated globally and as reliant upon ByteDance engineers who continually develop and maintain the recommendation engine and other core functionality.
TikTok U.S. Data Security Inc. (TTUSDS) is a wholly owned subsidiary of TikTok, Inc. TikTok created TTUSDS to limit ByteDance’s access to the data of TikTok’s users in the United States and to monitor the security of the platform. According to TikTok, TTUSDS employees are separated from other TikTok employees, and it partnered with Oracle to migrate the U.S. version of the TikTok platform into a cloud environment run by Oracle.
C. National Security Concerns
The Executive first became concerned about the PRC’s influence over TikTok in 2018. In 2019, upon finding that foreign adversaries were exploiting vulnerabilities in information and communications technology, President Trump declared a national emergency. Later, the Committee on Foreign Investment in the United States (CFIUS) identified national security concerns relating to TikTok’s predecessor, Musical.ly, and President Trump ordered ByteDance to divest assets enabling TikTok’s operation in the United States.
Litigation ensued, and two courts enjoined the President’s prohibitions. President Biden later withdrew the prior executive order and issued a new one identifying the PRC as a foreign adversary that presented national security risks through software applications, including TikTok.
During 2021 and 2022, TikTok proposed a National Security Agreement (NSA) to mitigate the Government’s concerns. After an extensive negotiation process, the Government concluded the NSA would not sufficiently mitigate the risks, in part because it still allowed certain data of U.S. users to flow to China and permitted ByteDance to exert control. The Government decided that divestiture was the only solution that would adequately address its national security concerns.
D. The Act
The Act identifies certain countries, including the PRC, as foreign adversaries and prohibits the distribution or maintenance of “foreign adversary controlled applications.” It creates two tracks: (1) TikTok is specifically identified, making it a foreign adversary controlled application by definition; (2) the Act provides a generally applicable framework for the President to designate other “covered companies” as foreign adversary controlled applications through certain procedures.
The Act makes it unlawful for an entity in the United States to provide services that distribute, maintain, or update a foreign adversary controlled application after a certain date. For TikTok, the prohibitions take effect on January 19, 2025. The Act provides a qualified divestiture exemption, whereby TikTok can escape the prohibitions by divesting assets that connect it to ByteDance and ensure that the PRC no longer controls the application.
E. Procedural History
We consolidated three petitions raising constitutional challenges to the Act and expedited the case. The parties submitted substantial evidence. Having considered the parties’ filings and arguments, we now issue this opinion.
II. Analysis
The petitioners seek a declaratory judgment that the Act violates the Constitution and an injunction preventing enforcement by the Attorney General. As this is a pre-enforcement challenge, we address whether the case is ripe and whether the petitioners have standing.
A. Standing and Ripeness
TikTok has standing to challenge the Act’s provisions as applied to TikTok. The Act’s prohibitions against providing hosting or distribution services to TikTok in the United States begin on January 19, 2025, creating a credible threat that third parties will cease supporting TikTok, injuring it.
These claims are also ripe because TikTok faces a substantial risk of hardship from delayed review and the record is adequate to resolve its claims.
B. The First Amendment
We conclude that the Act implicates the First Amendment because TikTok engages in expressive activity through the curation of content. Although the Act is facially content neutral, it is justified in part by the Government’s concern with the PRC’s ability to manipulate content, which is related to speech.
We assume without deciding that strict scrutiny applies. Under strict scrutiny, the Government must show the restriction furthers a compelling interest and is narrowly tailored. The Government identifies two compelling interests: preventing the PRC from collecting sensitive data about U.S. persons and preventing covert content manipulation by the PRC.
Both are compelling national security interests. Based upon extensive evidence, the Government’s fear that the PRC will leverage TikTok to collect data on Americans is well founded. Similarly, the potential for the PRC to manipulate discourse on a major platform secretly and at scale poses a grave threat to the free exchange of ideas.
The Act is narrowly tailored. It does not suppress content or outlaw speech; it targets foreign adversary control of a platform. The Act includes a divestiture option, which, if executed, allows TikTok to continue operating in the United States. Other proposed less restrictive alternatives are not equally effective. The Government reasonably concluded that the proposed NSA would not sufficiently mitigate risk. Similarly, no other suggested solution would effectively counter the unique combination of data-collection and content-manipulation risks posed by foreign adversary control of TikTok. The Act therefore satisfies strict scrutiny under the First Amendment.
C. Equal Protection
TikTok argues the Act violates equal protection because it singles out TikTok. The Act, however, addresses a known threat from a foreign adversary’s control of a powerful communications platform. TikTok’s equal protection challenge fails because the Act’s classification rationally furthers a legitimate government interest — indeed, a compelling one.
D. The Bill of Attainder Clause
The Act is not a bill of attainder. It is not punitive; it is remedial and forward looking. ByteDance can divest TikTok at any time and thereby free TikTok from the Act’s prohibitions. The Act is thus not analogous to historical forms of legislative punishment.
E. The Takings Clause
The Act does not effect a per se regulatory taking. Divestiture is a sale, not a confiscation. TikTok retains economically valuable assets and can be sold to a compliant buyer. The constitutional claim under the Takings Clause therefore fails.
F. Alternative Relief
The petitioners’ requests for alternative forms of relief, such as a temporary injunction or special master, are moot in light of our decision on the merits.
III. Conclusion
We recognize this decision has significant implications. If TikTok does not execute a qualified divestiture by January 19, 2025, the platform will effectively become unavailable in the United States. That burden, however, is attributable to the PRC’s hybrid commercial threat to U.S. national security.
The Act, carefully crafted to prevent foreign adversary control of a communications platform in the United States, does not violate the Constitution. The petitions are denied.
CONCURRENCE
Srinivasan, Chief Judge, concurring in part and concurring in the judgment:
I join all aspects of the court’s opinion other than Part II.B, from which I respectfully take a slightly different approach. While the majority assumes strict scrutiny applies and concludes the Act survives strict scrutiny, I would decide that only intermediate scrutiny applies and that the Act easily passes that standard. It is well established that content-neutral and justified-by-national-security concerns may be subject merely to intermediate scrutiny. Under that standard, the Act’s divestiture requirement is amply supported by important governmental interests, including preventing the PRC from collecting data on Americans and covertly manipulating content for national security ends, and is not substantially broader than necessary. The Act therefore complies with the First Amendment even under intermediate scrutiny, and we need not apply strict scrutiny. In all other respects, I concur fully in the court’s judgment and opinion.
All petitions denied.
