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TikTok will sue the Trump administration over order banning US transactions

TikTok is preparing to mount a legal challenge as early as Monday to President Donald Trump’s executive order banning its US transactions. 

On August 6, the president issued an order that directed the Secretary of Commerce to come up with a list of transactions involving the app’s Chinese parent company ByteDance and its holdings that should be banned after 45 days.

TikTok plans to argue that the executive order’s reliance on the International Emergency Economic Powers Act deprives it of due process, according to Reuters. 

The social media company is also expected to contest its classification by the White House as a national security threat.   

It comes as the company continues talks with the likes of Microsoft over the sale of its US operations. 

While TikTok is best known for its short videos of people dancing and going viral among teenagers, US officials have expressed concerns that information on users could be passed on to China’s communist government. 

Trump claims there is ‘credible evidence’ that TikTok poses a security threat, something the firm flatly denies, calling the claim ‘rumors and misinformation’.

TikTok has said that it has never provided user data to China and that it would not do so if asked.  

It was not immediately clear which court TikTok plans to use to file its lawsuit. 

The company had previously said it was exploring its legal options, and its employees were also preparing their own lawsuit.

According to CNBC, TikTok is currently working to ensure its employees continue to get paid even if it is banned in the US.  

A spokesperson also confirmed to CNBC on Saturday the company is mounting a challenge against Trump. 

‘Even though we strongly disagree with the Administration’s concerns, for nearly a year we have sought to engage in good faith to provide a constructive solution,’ the spokesperson said. 

‘What we encountered instead was a lack of due process as the Administration paid no attention to facts and tried to insert itself into negotiations between private businesses.

‘To ensure that the rule of law prevails and that our company and users are treated fairly, we have no choice but to challenge the Executive Order through the judicial system,’ they added. 

Trump also issued a second executive order relating to the app on August 14 that gave ByteDance 90 days to divest the US operations of TikTok. 

ByteDance has been making progress in talks with potential acquirers, including Microsoft Corp and Oracle. 

Some of ByteDance’s US investors could also join the winning bid.

Trump has said he would support an effort by Microsoft to buy TikTok’s American operations if the US government got a ‘substantial portion’ of the proceeds. 

TikTok’s legal challenge would not shield ByteDance from having to divest the app in the US. 

This is because it does not pertain to the August 14 order on the sale of TikTok, which is not subject to judicial review.

However, the move shows that ByteDance is seeking to deploy all the legal ammunition at its disposal as it tries to prevent the TikTok deal negotiations from turning into a fire sale.

The Trump administration has stepped up its efforts to purge what it deems ‘untrusted’ Chinese apps from US digital networks. 

Beyond TikTok, Trump has also issued an order that would prohibit transactions with Tencent Holding Ltd’s WeChat.

On Saturday,  some US-based users of WeChat announced they are also suing Trump in a bid to block an executive order that they say would effectively bar access in the US to the hugely popular Chinese messaging app.

The complaint, filed Friday in San Francisco, is being brought by the nonprofit US WeChat Users Alliance and several people who say they rely on the app for work, worship and staying in touch with relatives in China. 

The plaintiffs said they are not affiliated with WeChat, nor its parent company, Tencent Holdings.

In the lawsuit, they asked a federal court judge to stop Trump’s executive order from being enforced, claiming it would violate its US users’ freedom of speech, free exercise of religion and other constitutional rights.

‘We think there’s a First Amendment interest in providing continued access to that app and its functionality to the Chinese-American community,’ Michael Bien, one of the plaintiffs’ attorneys, said Saturday.  

The twin executive orders – one for each app – are expected to take effect September 20. 

TikTok now has more than 100million monthly users in the US and has been downloaded 2billion times globally. 

WeChat, which has more than 1 billion users, is less well-known than TikTok to Americans without a connection to China. 

Mobile research firm Sensor Tower estimates about 19 million US downloads of the app. 

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