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In an interim relief for TikTok, the U.S. judge from the district court of Columbia announced a preliminary injunction to the Trump government’s decision to ban TikTok downloads from the U.S. app stores.
On Sunday, September 27, the U.S. district judge Carl Nichols blocked the Trump administrations’ decision to ban TikTok from the U.S. app stores. Earlier this month on September 20, President himself approved the TikTok deal with Oracle Corporation (NYSE: ORCL) and Walmart Inc (NYSE: WMT). “I have given the deal my blessing,” he said.
Earlier, the U.S. Department of Commerce said that they would remove the TikTok app from the U.S. on September 20. This was later moved to September 27, as the talks continued about TikTok’s future in the United States. However, the latest injunction from the district judge has stopped the government from banning the application.
The U.S. Commerce Department defended its position saying the executive order is “consistent with the law and promotes legitimate national security interests”.
“The Government will comply with the injunction and has taken immediate steps to do so, but intends to vigorously defend the E.O. and the Secretary’s implementation efforts from legal challenges,” the department added.
Although ByteDance gets some interim relief, the judge has declined to block any restrictions effective from November 12. These restrictions can likely have an effect on the business and technical arrangements that are crucial for the app to function.
TikTok Assures Ongoing Dialogue with the U.S. Government
Soon after the district judge announced the injunction, TikTok released a statement saying:
“We’re pleased that the court agreed with our legal arguments and issued an injunction preventing the implementation of the TikTok app ban. We will continue defending our rights for the benefit of our community and employees.”
“At the same time, we will also maintain our ongoing dialogue with the government to turn our proposal, which the President gave his preliminary approval to last weekend, into an agreement,” the China-based company explained.
As per the deal TikTok parent, ByteDance will float a new entity TikTok Global for operating in the U.S. Markets. In TikTok Global, the parent company gets an 80% majority stake while Oracle keeps 12.5% and Walmart gets 7.5%. As per the current schedule, TikTok Global will go for a public listing in the U.S. markets within the next 12 months.
However, the terms of the deal on who owns the majority ownership on TikTok Global are still questionable. Washington continues to assert that TikTok poses a national security threat to the country due to its close ties with the Chinese Communist Party (CCP). TikTok has over 100 million monthly active users in the United States. The Trump administration has expressed concerns with ByteDance sending the U.S. citizens’ data to China.
TikTok lawyer John E. Hall called the ban as “unprecedented” and “irrational”. During a 90-minute hearing, Hall asked:
“How does it make sense to impose this app store ban tonight when there are negotiations under way that might make it unnecessary? This is just punitive. This is just a blunt way to whack the company. … There is simply no urgency here.”
The U.S. Justice Department (DOJ) has called the injunction as interference with the “formal national security judgment of the president”.