LSU gymnast Olivia Dunne has 7.3 million followers on TikTok. Haley and Hanna Cavinder of Miami women’s basketball have 4.4 million. They and other athletes use the video-sharing app to generate NIL earnings, sometimes reaching six or even seven figures.
They all stand to lose if TikTok is banned, as threatened by President Joe Biden and both Republican and Democratic lawmakers.
But can the government lawfully ban the Chinese-owned app, which has more than 100 million U.S. users but comes with national security and privacy concerns?
A ban would almost certainly trigger litigation by the apps corporate owners centered on First Amendment free speech and Fifth Amendment due process protections, but it could also spur legal action that has athletes and other influencers as plaintiffs.
Last Wednesday, The Wall Street Journal reported that the Biden administration has given TikTok’s owner, the Beijing-headquartered ByteDance, an ultimatum: Divest their stakes or the app will be banned. The message was relayed through the Committee on Foreign Investment in the United States, an inter-agency entity that reviews foreign firms’ investments for national security and related implications.
TikTok dismissed the demand as ineffective, arguing divestment wouldn’t address national security apprehensions since “a change in ownership would not impose any new restrictions on data flows or access.” The company also refuted underlying concerns by insisting it relies on “transparent” systems to ensure “U.S.-based protection of U.S. data.”
If he presses on, Biden would become the second U.S. president to try to ban TikTok. His predecessor gave it a shot and came up short.
In 2020, President Donald Trump issued an executive order, followed by other administrative actions, intended to block transactions between ByteDance and U.S. citizens and strip TikTok from U.S app stores. The Chinese Communist Party, government officials worried, might use TikTok to access user data, spread propaganda and censor disfavored content.
ByteDance and TikTok Inc., the California-based subsidiary that runs the app, sued Trump and then-Commerce Secretary Wilbur Ross. They sought an injunction and other remedies to prevent the government from carrying out a ban.
ByteDance and TikTok Inc. raised several key arguments that would likely resurface in any new litigation.
A ban, they argued, would “shutter a forum that millions of Americans use for speech and expression” and “unlawfully burden the freedoms guaranteed by the First Amendment.” The companies noted they use the app to “create and share messages about a variety of issues and current events, including, for example, their support for small businesses and International Women’s Day.” They also argued that a ban would compromise First Amendment protections of their software code, “an expressive means of communication.”
ByteDance and TikTok Inc. also insisted a prohibition would violate Fifth Amendment due process protections. They maintained they were denied both notice of the proposed ban and a credible opportunity to be heard about it. The U.S. government, the companies argued, sought an “unjustifiable economic deprivation” that would “interfere” with “legitimate investment-backed expectations.”
Meanwhile, three TikTok influencers—Douglas Marland, Cosette Rinab and Alec Chambers—filed their own lawsuit against Trump and Wilbur. Each asserted they used TikTok to engage in speech and earn a living. Rinab, for example, has 2.3 million followers with whom she shares videos on behalf of fashion brands and other companies. According to court documents, Rinab earned between $5,000 and $10,000 per video in 2020.
Multiple federal judges ruled against the Trump Administration, reasoning that the alleged national security threat appeared more hypothetical than documented. They also surmised that a ban was excessive and that less draconian alternatives ought to be considered first.
The government’s scrutiny of TikTok is occurring while other foreign-owned companies face regulatory risks and legal issues stemming from investments in sports. Saudi-backed LIV Golf is mired in federal litigation with the PGA Tour, which has expanded the case to include the Public Investment Fund of the Kingdom of Saudi Arabia and its governor, Yasir Othman Al-Rumayyan, as defendants. The Justice Department has launched its own probe into the LIV Golf-PGA Tour dispute. Last year, Russian billionaire Roman Abramovich sold Chelsea F.C. in the wake of the Russian invasion of Ukraine and monetary sanctions against Russian assets.
As foreign investors—particularly those with close ties to their governments—play more prominent roles in U.S. sports and sports-adjacent industries, expect more pushback on national security, human rights, and other important American interests.
The TikTok situation is unique if for nothing else than its ironies. China has banned TikTok, along with Facebook, Instagram and some Google services. Then there’s the U.S. government attempting to ban a communications platform in order to prevent … government influence.