ByteDance pushes back on Trump administration's TikTok divestiture order

ByteDance, the Chinese parent company of TikTok, has filed a petition Tuesday evening with the D.C. Circuit Court of Appeals, challenging an Aug. 14 order from the Trump administration requiring the video-sharing app to be divested by Thursday.

Tiktok said in a statement on Twitter that despite engaging with the Committee on Foreign Investment in the United States in good faith to address its national security concerns, there has been "no substantive feedback" on its "extensive data privacy and security framework" from President Trump following preliminary approval on a sale of its U.S. operations to software giant Oracle and retail giant Walmart in September.

Ticker	Security	Last	Change	Change %
ORCL	ORACLE CORP.	185.73	+1.99	+1.08%
WMT	WALMART INC.	84.08	-0.17	-0.20%

"Facing continual new requests and no clarity on whether our proposed solutions would be accepted, we requested the 30-day extension that is expressly permitted in the August 14 order," Tikok said."With the November 12th CFIUS deadline imminent and without an extension in hand, we have no choice but to file a petition in court to defend our rights and those of our more than 1,500 employees in the U.S."

"We remain committed to working with the administration -as we have all along- to resolve the issued it has raised, but our legal challenge today is a protection to ensure these discussions can take place," the platform added.

In its court filing, ByteDance said it submitted a fourth proposal on Friday that contemplated addressing U.S. national 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.”

The company noted that it plans to file a request “to stay enforcement of the Divestment order only if discussions reach an impasse and the government indicates an intent to take action to enforce the order.”

The petition names President Trump, Attorney General William Barr, Treasury Secretary Steven Mnuchin and CFIUS.

US JUDGE UNSURE IF HE HAS GROUNDS TO ISSUE NEW TIKTOK INJUNCTION

ByteDance and TikTok allege that a July 30 CFIUS action and the Trump administration's order that followed "seek to compel the wholesale divestment of TikTok" based on the government’s "purported national security review" of the company's 2017 acquisition of U.S. social media app Musical.ly, which ByteDance argues does not "include the core technology or other aspects of the TikTok business that have made it successful."

The company claims CFIUS "rejected ByteDance’s mitigation proposals and had not identified adequate mitigation measures, without any explanation of the basis for that determination" and that the matter was then referred to President Trump "without affording ByteDance a meaningful opportunity to respond to CFIUS’s determination to reject mitigation."

"While Treasury officials expressed their intent to conclude that the agency had concerns, CFIUS itself never informed ByteDance of its concerns prior to announcing the CFIUS action on July 30 and did not provide any explanation for its determination that the purported national security risks could not be adequately mitigated other than through complete divestiture," ByteDance wrote. "Moreover, CFIUS’s determination concluding CFIUS’s action was issued only a few hours before the referral to the President, precluding ByteDance from a meaningful opportunity to respond."

ByteDance argues that CFIUS chose "harshest measure available under the statute...without considering alternatives, trying to craft a narrower solution, or providing a cogent explanation of why divestiture was justified over such alternatives."

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In addition, Bytedance claims CFIUS violated the Administrative Procedure Act for failing to "adequately explain its decision" and for not taking into account "alternative mitigation proposals submitted by petitioners" and that due process rights under the Fifth Amendemnt were violated as a result of the committee's "rejection of mitigation, truncation of its review and investigation, and referral of the matter to the President, and the manner in which the Divestment Order was issued."

The White House and the Treasury Department declined to comment. Representatives for CFIUS and the Department of Justice did not immediately return FOX Business' requests for comment.

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