U.S. government appeals order blocking TikTok ban from taking effect

[November 13, 2020]  By David Shepardson

WASHINGTON (Reuters) - The U.S. Justice Department said it had appealed a Pennsylvania judge's Oct. 30 order that blocked the government from imposing restrictions on Chinese-owned short video sharing app TikTok that were set to take effect on Thursday.

The Commerce Department's August order would have barred transactions with TikTok, which its owner ByteDance had warned would effectively prohibit TikTok's use in the United States.

The White House did not appear to be a in a rush to implement an Aug. 14 divestiture order that directed ByteDance to sell TikTok by Thursday.

There were no immediate efforts by the Trump administration to enforce that order, even though it was not clear whether the government would formally grant a request by ByteDance to extend the sale deadline.

The Commerce Department said Nov. 1 it would comply with Judge Wendy Beetlestone's order blocking the ban, but said it would "vigorously defend" its actions.

TikTok did not immediately comment on the government's appeal to the U.S. Third Circuit.

Beetlestone enjoined the agency from barring data hosting within the United States for TikTok, content delivery services and other technical transactions.

President Donald Trump's administration contends that TikTok poses national security concerns as personal data collected on 100 million Americans who use the app could be obtained by China's government. TikTok denies the allegations.

Beetlestone wrote the "government’s own descriptions of the national security threat posed by the TikTok app are phrased in the hypothetical."

On Sept. 27, U.S. District Judge Carl Nichols in Washington issued a preliminary injunction in a suit brought by ByteDance that stopped Commerce from ordering Apple Inc <AAPL.O> and Alphabet Inc's Google <GOOGL.O> app stores to remove TikTok for download by new users. That order had been set to take effect later that day.

The U.S. Treasury Department said on Wednesday it wanted a resolution of national security concerns it has raised about TikTok before a Thursday divestiture deadline. A Treasury spokeswoman had no comment on Thursday.

ByteDance has been in talks for a deal with Walmart Inc <WMT.N> and Oracle Corp <ORCL.N> to shift TikTok's U.S. assets into a new entity called TikTok Global. It said on Tuesday it had requested a 30-day extension of the divestiture deadline to finalize terms. Trump said in September the deal had his "blessing."

ByteDance on Tuesday filed a petition with the U.S. Court of Appeals in Washington challenging the Aug. 14 divestiture order, which gave the Justice Department power to enforce the demanded sale. A Justice Department spokeswoman on Thursday declined to comment.

ByteDance said a fourth proposal submitted on Friday sought to address U.S. security concerns "by creating a new entity, wholly owned by Oracle, Walmart and existing U.S. investors in ByteDance, that would be responsible for handling TikTok's U.S. user data and content moderation."

(Reporting by David Shepardson; Editing by Chris Reese and Lincoln Feast.)

[© 2020 Thomson Reuters. All rights reserved.]

Copyright 2020 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.