U.S. District Court Judge Carl Nichols ruled Sunday in favor of a preliminary injunction to halt a ban of TikTok that was set to take effect at 11:59 p.m ET, but denied in part, for now, an injunction against the Nov. 12 action.
In his ruling, Nichols wrote that the motion was granted on the “prohibited transactions” in Paragraph 1 of the Commerce Identification set to go into effect at midnight. He also denied in part, for now, the prohibited transactions in Paragraphs 2–5 of the Commerce Identification, which go into effect on Nov. 12.
He also ordered that on Sept. 28 at 11 a.m., all parties will have another hearing to review the sealed memorandum opinion, “and inform the Court whether the opinion can be unsealed.”
Nichols listened to arguments from Justice Department and TikTok lawyers during a 90-minute hearing Sunday morning about the ban, which was initiated by President Donald Trump’s executive order on Aug. 6, and set in motion by the Treasury Department’s Committee for Foreign Investments in the United States (CFIUS) and the Commerce Department.
Attorney John E. Hall representing TikTok said that the government’s ban was “unprecedented” and “irrational,” noting that allowing it to happen would serve as a punishment against the company even as a deal between Oracle, Walmart, and other U.S. investors was in active negotiations. That deal is still subject to approval by the CFIUS and the Chinese government.
“How does it make sense to impose this app store ban tonight when there are negotiations underway that might make it unnecessary?” Hall asked the court. “This is just punitive. This is just a blunt way to whack the company. There is simply no urgency here.”
The Justice Department argued that allowing the preliminary injunction to succeed would enable Americans to continue downloading the app, which would be “interfering with a formal national security judgment of the president; altering the landscape with respect to ongoing CFIUS negotiations; and continuing to allow sensitive and valuable user information to flow to ByteDance with respect to all new users.”
Documents filed under seal Friday were released on Sunday morning, though parts of it were redacted -as agreed upon by both parties – by the government.
The executive orders signed by Trump targeted the short-form video app in the U.S., alongside Tencent Holdings’ WeChat. A preliminary injunction halting the WeChat ban was granted on Sept. 20, by a federal court.
Both the WeChat and TikTok bans are part of a larger effort by the U.S. government to investigate Chinese companies with financial ties to U.S. companies in the name of combatting “national security risks.” In addition to WeChat, the government is starting to look into other companies that have financial ties to Tencent in the U.S.; on Sept. xx the CFIUS sent letters to League of Legends and Valorant maker Riot Games and Fortnite developer Epic Games seeking information on its security protocols related to U.S. user data.
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