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After the Supreme Court heard oral arguments on a law that could ban TikTok, it seems that one of its last possible lines of safety is unlikely to save it from the imminent expulsion.
TikTok will be banned from the United States unless the Supreme Court prevents the law from taking effect before the January 19 deadline, or its China-based parent company ByteDance finally agrees to sell it. A sale – and return – of TikTok could happen after the deadline, and President-elect Donald Trump can be creative in trying not to apply the law once he is sworn in the next day. But the longer it takes, the more exciting things are looking for TikTok.
Bloomberg Intelligence senior litigation analyst Matthew Schettenhelm gave TikTok a 30 percent chance of winning at the Supreme Court before oral arguments, but lowered that prediction to just 20 percent after hearing the questioning of the judges. TikTok has made a final appeal to the court to issue an administrative stay without reporting a decision on the merits of the law, something that Trump has suggested could try to sell a TikTok sale. Schettenhelm says that’s unlikely — the court doesn’t tend to issue that kind of break just for a change in administration, he adds, and it’s unlikely he wants to set that precedent.
A short order on the case could come as soon as Friday afternoon, after the judges are expected to meet. The court is also expected to issue orders Monday morning, though Schettenhelm cautions not to read them if nothing is released by then — it may just mean they’re fleshing out their reasoning in a longer written order.
Trump has said he would like to save the app, and in theory, could declare that he will not apply the divest-or-ban law. But Justice Sonia Sotomayor pointed out that even if she chooses not to enforce the law, this may not provide sufficient protection for companies like Apple and Google – which could be fined $5,000 per user who accesses TikTok s He keeps it in his app stores. US Solicitor General Elizabeth Prelogar said the statute of limitations is five years; those companies are still violating the law, as long as it remains on the books, and could face penalties even after Trump leaves office, if the next administration decides to enforce it.
“I think these companies would take a huge risk by not complying with the law in the hope that President Trump doesn’t enforce it against them,” Schettenhelm says. “You’re getting into hundreds of billions of dollars of potential liability. And even if President Trump says, ‘Don’t worry, I’m not going to enforce it against you,’ you really want to take the chance that he won’t Is he going to change his mind about it? Do you really want to give him that level of leverage over your company?
“I don’t see another social media company that is similar to TikTok.”
Schettenhelm does not believe that a decision against TikTok will create a precedent that threatens US-based social media companies. “I don’t see another social media company that is similar to TikTok,” he says, pointing out that the arguments are largely centered around ownership. The foreign e-commerce companies like Shein and Temu that have come could be another story. But, he says, “none of this really jumps out as an imminent risk just because of this argument.”
Conversely, Cornell University law professor and First Amendment expert Gautam Hans agrees that the justices are unlikely to overturn the law, but worries that such a decision could have broader implications for other companies. During the arguments, judges and lawyers for TikTok and its users discussed hypotheses about whether a ban on certain types of corporate structure (such as ownership by a Chinese parent company) would allow for backdoor speech regulations – including requiring the owner of the company to sell to punish him for protected speech. But those concerns didn’t seem to matter to the court.
“What remains unfortunate is the gullibility with which many of the justices have treated this law, which clearly implicates free speech rights for underspecified national security reasons,” Hans said in a statement. “I don’t think the distinction between foreign and domestic ownership is stable enough to alleviate my concerns that a decision upholding the ban on TikTok creates a very slippery slope.”
