The US has sought to curb big Chinese technology firms by using export controls to limit sales of key innovations.
The United States Department of Commerce says it will “vigorously defend” an executive order that seeks to bar transactions with Chinese-owned short video-sharing app TikTok after a federal judge halted the action.
US District Judge Wendy Beetlestone on Friday blocked the Commerce Department order set to take effect on November 12 that would have effectively barred ByteDance-owned TikTok from operating in the country.
The Commerce Department said on Sunday it would “comply with the injunction … but intends to vigorously defend the [executive order] and the Secretary’s implementation efforts from legal challenges.”
Beetlestone urged the agency not to bar data hosting within the US for TikTok, or content delivery services and other technical transactions related to the app.
US President Donald Trump’s administration contends that TikTok poses national security concerns as personal data collected on 100 million Americans who use the app could be obtained by China’s government. TikTok denies the allegations.
ByteDance is fighting the US administration’s orders while simultaneously trying to push through a deal to sell a stake in TikTok to US-based firms to ease concerns about data privacy.
Talks have been continuing to finalise a preliminary deal for US retail giant Walmart Inc and US software maker Oracle Corp to take stakes in a new company, TikTok Global, that would oversee US operations. Trump said last month the deal had his “blessing.”
The Bloomberg news agency reported last month that ByteDance is working with US regulators to resolve outstanding security concerns over its planned stake sale. People familiar with the matter reportedly said the companies involved are bracing for the approval process to drag on past Tuesday’s US presidential election.
China has accused the US of “bullying” and threatened to take countermeasures.
‘Phrased in the hypothetical’
In Friday’s federal court ruling, Judge Beetlestone wrote that the “government’s own descriptions of the national security threat posed by the TikTok app are phrased in the hypothetical.”
On September 27, US District Judge Carl Nichols in Washington, DC, issued a preliminary injunction in a suit brought by ByteDance that stopped the Commerce Department from ordering Apple Inc and Alphabet Inc’s Google app stores to remove TikTok for download by new users. That order had been set to take effect later that day.
Nichols is set to hold a hearing on Wednesday on the other aspects of the Commerce Department order that Beetlestone blocked on Friday.
Beetlestone’s order, in a suit brought by three TikTok content creators, also blocks the app store download ban.