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Illustration: Natalie Peeples/Axios
TikTok argues that the divestiture required by a newly passed law is not "viable" because of the timing and complexity of a sale, per court filings seen by Axios.
Why it matters: The strength of TikTok's arguments before a federal court will either allow the app to keep functioning as-is in the U.S. or convince a judge that a new owner is the only way for it to exist in the country.
Driving the news: In court filings made public Thursday, TikTok argues in depth for the first time:
- Why divestiture from parent company ByteDance would be impossible within the required timeline.
- And why the national security plan it was working on with the Committee on Foreign Investment in the United States was sufficient.
- It also details its back-and-forth with CFIUS, which fizzled out and which the company alleges became politically motivated.
What's inside: Former Verizon executive Randal Milch argues in a new filing that complicated tech divestitures take lots of time and a sale involving TikTok would be especially arduous given ByteDance's global operations.
- Milch, an expert witness for TikTok, called the divestiture option "entirely illusory" and operationally unfeasible by the deadlines of January 2025 or, at the president's discretion, that April.
- It would take "much longer" to divest than what the law affords, Milch said, noting that Verizon divestitures took about twice as long.
The other side: The sale-or-ban law's authors have previously responded to TikTok's argument that there's not enough time for divestiture by saying the company could have predicted that because it was a long time coming.
Another filing, an April 1 letter from TikTok counsels written to DOJ official David Newman, gets into the CFIUS back-and-forth in detail, saying that the company was ready to talk to the panel again after a long period of not hearing anything.
- Per the letter, CFIUS started backing away from negotiations with TikTok in August 2022 "for reasons that have never been explained despite numerous entreaties from counsel."
- TikTok's counsels say U.S. officials then began "undermining the confidential process" and ended up abandoning the effort by March 2023.
- The lawyers write that seven months later, the government "demanded divestment and source code migration. And the very next day announced its support for legislation explicitly calculated to provide the administration with additional authorities to compel the divestiture of TikTok or ban the platform outright."
A filing written by UC Berkeley professor Steven Weber on behalf of TikTok argues that national security fears are overblown.
- "Even if TikTok were able to implement the type of 'qualified divestiture' contemplated by the act, the concerns that animated the act would remain, just as they do with respect to many other social media and entertainment platforms."
Christopher Simkins, a former DOJ official and CFIUS negotiator, argues in a filing that the national security agreement that had been in the works would be sufficient to mitigate security concerns.
What's next: DOJ's brief is due July 26.
