Would a U.S. Ban on TikTok Stand Up In Court? What Can Businesses Do if a Ban is Enacted?

There is momentum in Congress toward banning TikTok in the U.S. or forcing its Chinese parent company, ByteDance, to sell to a non-Chinese owner.

A TikTok ban would significantly impact U.S. businesses. Would a ban pass court scrutiny? What are the options for businesses if a ban occurs?

U.S. businesses advertise heavily through TikTok, and with good reason. It has 170 million users in the U.S. U.S. TikTok users spend an average of an hour and a half daily on the app – far more than the second-place app, Instagram, which averages about 30 minutes. U.S. businesses spent about $6.2 billion in 2023 on advertising on TikTok.

There is bipartisan congressional concern about TikTok. ByteDance is widely believed to be controlled by the Chinese Communist Party (CCP).

Members of Congress have several concerns: TikTok gathers an extraordinary amount of information about its app users, such as location data, face and voice information, keystroke patterns, and phone and social network contacts. There is concern that the CCP could use this information maliciously, such as to coerce American residents into cooperating with its aims.

Many are concerned that the CCP has and will use its TikTok control to manipulate U.S. opinion. Some are concerned that TikTok is a weapon intended to negatively impact Americans’ mental health.

Interestingly, TikTok is not a permitted app in China. In China, ByteDance operates a similar app called Douyin, which the CCP censors.

Some TikTok bans are already in place. The federal government banned the TikTok app from government-owned mobile devices and networks, as have around 40 states. Several U.S. universities banned the TikTok app from school-owned devices and networks, such as campus Wi-Fi. U.Va. banned the app from school-owned devices and prohibited employees from using TikTok via its computer networks.

In Congress, a bill that would ban TikTok in the U.S. or force its sale to a non-Chinese owner passed the House of Representatives and is before the Senate. President Biden said he would sign it.

If such a law is passed, would it survive court review? Probably so if the bill’s language is carefully crafted and its passage is handled appropriately.

The biggest challenge would be under the Free Speech Clause of the First Amendment. The crucial fight will be over the level of legal scrutiny the new law would receive. The choices are “strict scrutiny” and “intermediate scrutiny.” Legal restrictions on speech subject to strict scrutiny rarely pass muster.
The more forgiving intermediate scrutiny standard can be applied when the law does not target a particular viewpoint and only incidentally restricts speech as a part of regulating conduct. Under intermediate scrutiny, the government has to prove that (i) the law serves a substantial or important governmental interest that is not the suppression of free speech, and (ii) the incidental restriction on free speech is no greater than necessary to achieve those goals.

Commentators disagree on whether the legislation proposed in Congress would survive even intermediate scrutiny.

Montana passed a law banning TikTok entirely. A federal trial court in Montana preliminarily enjoined enforcement of the law, finding, among other things, that it violates the First Amendment. Montana is appealing that decision. Regardless, it appears Montana failed to put on certain kinds of proof that might have won its case.

I believe Congress can craft its legislation to survive intermediate scrutiny. Congress would be on solid ground in arguing national security and consumer protection reasons. Those are important governmental interests.

The tougher question is whether that law would be no more impactful than necessary to achieve those governmental goals. Would the government’s interests be sufficiently met by enacting a strong federal U.S. data privacy law, or do the government’s interests require that an influential app not be controlled by the CCP?

If the law is enacted, what are the options for affected U.S. businesses?

A business could join the inevitable litigation against the law on First Amendment and other grounds. Some businesses participated in the lawsuit challenging the Montana law.

If the law withstands legal scrutiny, then U.S. businesses have only technological and marketing choices available. Even if TikTok is banned in the U.S., that would not prevent accessing it via a VPN, which enables the user to pretend to be in another country where TikTok remains available. Does TikTok have such a powerful grip on the psyche of many Americans that they would use VPNs to access it? Would that be enough for U.S. companies to continue marketing on it?

Other short-form video services certainly would benefit. Perhaps a lot of traffic would migrate to Instagram Reels or YouTube Shorts.

The bottom line is if your business depends on TikTok, lay the groundwork now to move whatever you have from it to other platforms.

Written on March 20, 2024

by John B. Farmer

© 2024 Leading-Edge Law Group, PLC. All rights reserved.