Justice Dept. Calls TikTok 'Direct Threat' to Privacy and Security of US

Tami Abdollah

Tami Abdollah was dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer. Follow her on Twitter.

Justice Dept. Calls TikTok 'Direct Threat' to Privacy and Security of US
TikTok | Solen Feyissa | Flickr

Justice Department lawyers argued in a federal court filing Thursday that TikTok's explosive growth and its relationship to the Chinese Communist Party made the popular social media app "a direct threat to the privacy and security of U.S. persons."

The U.S. Department of Justice filing is in response to a request by one of TikTok's U.S.-based employees for a judge to pause President Trump's ordered ban on TikTok, which would take effect on Sept. 21. The filing is a first look at the U.S. government's arguments against TikTok and its employee's efforts to push back on the ban.


TikTok has found itself in the Trump administration's line of fire over concerns that its China-based parent company, ByteDance Ltd., is sharing the popular app's data with the communist government. On August 6, Trump issued an executive order giving the app 45 days before "transactions" with the platform are banned. Meanwhile, the president has also pushed for a sale of TikTok to a U.S.-based parent company.

Last month TikTok technical program manager Patrick S. Ryan filed his federal lawsuit in the U.S. District Court of the Northern District of California accusing Trump of violating his Constitutional rights and defaming and disgracing U.S.-based TikTok Inc. employees by painting them as working for the Chinese Communist Party.

The government's filing states that Chinese law imposes "broad obligations on citizens and companies to cooperate" with the Chinese Communist government and that they must provide data and technological support to security agencies and the military.

"ByteDance is a Chinese company through and through," the filing argues. "It is headquartered in Beijing, subject to Chinese intelligence laws, contains internal CCP committees, and its founder and CEO has publicly affirmed that the company is committed to promoting the agenda and messaging of the CCP."

The government's Thursday filing asked U.S. District Judge Vince Chhabria, an Obama appointee, to deny Ryan's request for a temporary restraining order, immediately pausing the ban.

TikTok has called the government's allegations against it "speculative" and has said it took "extensive" efforts to address the administration's concerns about national security. The company did not immediately reply to a request for comment, but a spokesman previously told dot.LA that the company has "never provided user data to the Chinese government, nor would we do so if asked."

But because Trump's executive order bans generic "transactions," Ryan argues it's unclear if TikTok Inc. can even pay its 1,500 U.S.-based employees their wages and salaries when it goes into effect later this month.

Ryan's attorneys argue that he and other TikTok employees are in "imminent danger of losing their livelihood through governmental action that has no basis in fact, was politically driven, and afforded (Ryan) no procedural protections," according to court filings.

The U.S. Department of Commerce doesn't need to define the term "transaction" until the day the order takes effect, making it unclear if it will ultimately exempt wages and salaries for employees.

"The 1,500 TikTok employees working in the U.S. and their families will not be able to pay their rent or mortgages, or pay for food, medical treatments, and other essentials of life," Ryan's filing for a temporary restraining order states. "The executive order has offered no evidence that TikTok has breached national security interests, is capable of breaching national security interests or is about to breach national security interests."

Moreover, because Trump's executive order states that any effort to violate it is deemed a "conspiracy," the language could have a "chilling effect" on people going to work and doing their jobs, said Alexander Urbelis, a partner at Blackstone Law Group LLP, which represents Ryan.

The penalties for such a violation are not trivial. A violator can be fined up to $1 million or 20 years in prison.

Many of the 1,500 employees are new, as TikTok expanded from 300 employees a year ago to five times that number today. The order also jeopardizes the immigrant visas of employees in the U.S. on H1B visas that require an employer to sponsor them, the lawsuit alleges.

Ryan's lawsuit is believed to be the first time an employee has sued the president over an executive order, Urbelis said. But Justice Department attorneys argued Thursday that while Ryan is an employee of TikTok, the executive order doesn't directly impact him. They add that Ryan has not alleged that the president "intended to injure him personally," which could give him a case.

"As an employee of a private company, (Ryan) does not have protected property interest in future wages and unearned salary," the government's filing argues.

While Trump's executive order is founded on the government interest of "preventing the PRC (People's Republic of China) from using TikTok to surveil the American people, censor information, sow misinformation, and collect and use 'vast swaths' of personal and proprietary information from American users to advance the PRC's own interests."

Justice Department attorneys argue that the president has discretion over what constitutes a national emergency, and that it is "essentially a political question," not a legal one.

Ryan's attorney, Urbelis, said in a statement Thursday that the government's arguments are an obvious after-the-fact effort to cover for the president's "ill-considered actions."

"The President's own words and the timing of his statements signaled an obvious intention to target and punish TikTok (as part) of the president's tough-on-China political play and because TikTok users have levied trenchant criticisms of the president and his administration," Urbelis said.

In a brief filed Thursday in support of Ryan's lawsuit, the Electronic Frontier Foundation, a digital rights advocacy group, and two TikTok users argued that the executive order has a "direct and arguably intentional effect" on the First Amendment rights of millions of people to communicate free of government interference.

"It is hard to imagine the national security interests that would be compromised by a foreign power knowing viewership data of most of the content on TikTok," the amicus brief states, adding that the order is too broad.

Trump issued a second executive order on Aug. 14 giving ByteDance 90 days to divest itself of its U.S. TikTok operations. Trump has said he supports the potential acquisition of TikTok by Oracle, though ByteDance has reportedly been in talks with multiple interested suitors, including Microsoft and Walmart. Amid those talks, TikTok CEO Kevin Mayer resigned last week.

__

Do you have a story that needs to be told? My DMs are open on Twitter @latams. You can also email me at tami(at)dot.la, or ask for my contact on Signal, for more secure and private communications.

tami@dot.la

Subscribe to our newsletter to catch every headline.

Cadence

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

Read moreShow less

Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

Read moreShow less

Gov. Gavin Newsom Vetoes California ‘BitLicense’ Bill To Regulate Crypto Exchanges

Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
Gov. Gavin Newsom Vetoes California ‘BitLicense’ Bill To Regulate Crypto Exchanges
State Attorney Alleges Gov. Newsom Interfered in Activision Lawsuit

California isn’t getting its version of the New York BitLicense bill anytime soon after all. Governor Gavin Newsom vetoed the bill Friday.

The bill, sponsored by Democratic Rep. Tim Grayson out of Vallejo, passed by the state assembly in a 71-0 vote at the beginning of September. Like New York State’s 2015 BitLicense legislation, AB 2269 would have set out requirements for the behavior of crypto exchanges such as Coinbase or Binance. Additionally, California crypto exchanges would’ve been prevented from trafficking in stablecoins (cryptocurrencies pegged to the value of an asset like the Yen, dollar, or Euro) without a license to do so.

Gov. Newsom explained his veto in a Sept. 23 message to the Assembly. The governor stated that while he shared “the author's intent to protect Californians from potential financial harm,” his administration “has conducted extensive research and outreach to gather input on approaches that balance the benefits and risk to consumers, harmonize with federal rules, and incorporate California values such as equity, inclusivity, and environmental protection.”

“It is premature to lock a licensing structure in statute,” the statement continued, “without considering both this work and forthcoming federal actions.” Newsom said it’s necessary for the government to be flexible “to ensure regulatory oversight can keep up with rapidly evolving technology and use cases and is tailored with the proper tools to address trends and mitigate consumer harm.”

It’s refreshing that a government official knows how legislation connected to new technology can fall short as the tech evolves. Still, Gov. Newsom also pointed out that AB 2269 would’ve cost “tens of millions of dollars for the first several years” out of the state’s general fund—something unaccounted for in the state’s yearly budget.

Rep. Tim Grayson responded to Newsom’s action via tweet, writing in part that the crypto “market is under-regulated at best and deliberately rigged against everyday consumers at worst. A financial market cannot be considered healthy if there are no guardrails in place to protect consumers from scams & bad actors.”

California’s legislators haven’t been alone in examining ways to bring some discipline into the cryptocurrency wilderness. In 2022 alone, Oklahoma passed HB 3279, and Utah passed (and signed into law) SB 182—both bills intended to create regulatory schemes and give state agencies the power to control any business related to digital currency.

Additionally, the White House released a statement on Sept. 16 outlining a “Comprehensive Framework for Responsible Development of Digital Assets,” which was a follow-up to President Joe Biden’s Executive Order from March 9, which was intended to ensure the responsible use of digital assets.


While Gov. Newsom’s veto means California is avoiding additional and possibly costly crypto regulations, for now, the tide nationwide seems to be turning in favor of putting rules in place to protect crypto investors. Given that in June, the Federal Trade Commission reported over $1 billion in losses to cryptocurrency scams since the beginning of 2021, some might say new regulations protecting consumers are overdue.
steve@dot.la
RELATEDEDITOR'S PICKS
LA TECH JOBS
interchangeLA
Trending