Federal Court Delays US Ban on TikTok

By Paul Ausick Published Sep 28, 10:05AM EDT

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Federal Court Delays US Ban on TikTok — © Anatoliy Sizov / iStock Unreleased via Getty Images

A federal district court judge on Sunday halted the Trump administration order banning social media app TikTok from the United States. The ban was to have taken effect at midnight.

While details of the ruling have been sealed, the effect is to allow Americans to continue using TikTok while the court considers the president’s executive order banning the app as a risk to national security.

Just one week ago, Oracle Corp. (NASDAQ: ORCL | ORCL Price Prediction) and Walmart Inc. (NYSE: WMT) announced that the president had granted “tentative approval” for the two companies to acquire 20% of a new U.S.-based company “responsible for providing all TikTok services to users in [the] United States and most of the users in the rest of the world.”

If the district court ultimately denies the administration’s order banning TikTok, the ruling surely will go to the Supreme Court and may not be heard for months.

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Last weekend’s deal between ByteDance, TikTok’s China-based owner, would create a new U.S.-based company called TikTok Global that would be majority-owned by U.S. investors and have a U.S. headquarters. Oracle would own 12.5% of TikTok Global and Walmart would own 7.5%.

The executive order claimed that TikTok presented a national security risk for U.S. citizens. The president also issued a similar ban against another popular Chinese messaging app, WeChat. That ban was enjoined by the federal district court in a suit brought by WeChat users who said their free speech rights were being trampled. TikTok itself is fighting the threatened ban on its app.

Is this just another Trump administration tempest in a teapot? Could be. The administration’s goal in banning TikTok is murky, and before this past weekend’s news regarding Trump’s tax returns, may have been nothing more than another administration attempt to confuse a complicated issue just enough to allow it to claim a victory and move on to something else.

The only thing that’s clear is that both the administration and ByteDance have to appear in federal court Monday morning at 11:00 a.m. ET to argue whether the judge’s full opinion may be released, and also that by Wednesday the two must meet and agree on a schedule for further court proceedings.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.