TikTok risks federal ban by not seeking divestment, US-China Commission member warns

Months before a key deadline, TikTok risks being banned in the US over its reluctance to sell its app, according to a member of the US-China commission.

In a court hearing Monday, TikTok challenged a law that requires a U.S. unit to be sold to a non-Chinese owner by Jan. 19 or face a ban. The government has warned of national security risks and Beijing’s potential influence over content on the social media platform.

TikTok’s lawyers told a panel of U.S. Circuit Court of Appeals judges in Washington that the sale would be impossible and that the law violates free speech rights. But the judges seemed skeptical that the platform has the right to display and moderate content with the same freedom as a U.S. company when its parent company is based in China.

The stalemate could mean TikTok’s 170 million US users will be cut off from access, though the ban is likely to be put on hold pending future legal challenges.

“TikTok is headed toward a full federal ban as a direct result of its failure to conduct an orderly asset sell-off,” U.S.-China Commission Commissioner Jacob Helberg wrote on X on Friday.

He later wrote: “All they have to do is withdraw and all their legal problems will disappear.”

Asked for comment, a TikTok spokesperson pointed to court documents stating that the law does not actually offer a choice between divestment and a ban.

“The ‘qualified sell-off’ that the statute requires to enable TikTok to continue to operate in the United States is simply not possible: not commercially, not technologically, and not legally,” it said. “And certainly not within the 270-day period required by the statute.”

For now, TikTok seems to be digging in for more legal wrangling. According to New York Post on Friday, the company hired a legal expert from NetChoice, a right-wing technology lobbying group, to work in its government relations department.

TikTok says it has severed most ties with its parent company, but some former employees have said Fortune earlier this year, it was reported that they were actually working closely with ByteDance.

Meanwhile, Beijing has increasingly used so-called golden shares of Chinese technology companies to expand oversight of big tech firms in the country.

In 2021, the Chinese government acquired a small stake in ByteDance’s Chinese subsidiary, which also gave it the right to appoint one board member.

Despite some interest from potential US buyers, TikTok has said that even if sales were possible, a US-only version wouldn’t be the same.

“Even if a divestiture were feasible, TikTok in the United States would still be reduced to a shadow of its former glory, stripped of its innovative and expressive technology that tailors content to each user,” TikTok wrote in a June court filing challenging the law.

This story was originally published on Fortune.com