TikTok Trounces Trump's Attempted Ban

Trump v. TikTok
Trump Photo: Anna Moneymaker/Getty Images

A D.C. federal judge has halted President Donald Trump's attempted ban on TikTok, finding that the U.S. government sought to act outside its authority by taking "arbitrary and capricious" action to regulate personal communications and the exchange or information via the app.

Trump on Aug. 6  issued an executive order that would bar "any transaction by any person" with TikTok's Beijing-based parent company ByteDance or any of its subsidiaries — citing concerns about national security, corporate espionage and censorship and attempting to invoke the International Emergency Economic Powers Act.

The ban was set to take effect in September and would have prevented U.S. users from downloading the app onto their phones or installing updates. TikTok sued and then sought emergency relief from the court through a preliminary arguing that the ban exceeded presidential authority, violated users' First Amendment rights and flouted the Administrative Procedures Act because it's arbitrary and capricious. (ByteDance was also mulling a partnership with Oracle for its U.S. operations, but that deal appears to be in limbo.)

On September 27, U.S. District Judge Carl J. Nichols granted TikTok's motion with respect to parts of the ban that would have gone into effect that day. Nichols, a Trump appointee, found that while the IEEPA gives the president broad authority it doesn't permit the regulation of informational materials and personal communications.

Then a Pennsylvania federal judge halted the ban in a suit brought by TikTok users — and, now, Nichols has granted the rest of the motion in this matter.

Nichols on Monday found TikTok has shown a likelihood of succeeding on its claims related to the IEEPA and APA. His opinion notes the dispute hinges on the definition of three key phrases: “to regulate or prohibit, directly or indirectly,” “personal communication,” and “information or informational materials.”

TikTok argues the ban exceeds authority by, at best, indirectly regulating personal communication and the exchange of information, while the government argued it was only trying to regulate commercial transactions.

Much of Nichols' opinion reads like a grammar lesson. "In short, by modifying the verbs 'regulate or prohibit' with the adverbs 'directly or indirectly,' Congress withdrew the President’s authority to control or forbid certain ends (objects), regardless of whether the means (prohibitions or regulations) aim to achieve those ends in a straightforward way (directly) or circuitously (indirectly)," he writes in the opinion. He  notes that the parties also dispute the meanings of "indirect" and "incidental" and "how to decide when a regulation indirectly regulates an activity, as opposed to burdening an activity incidentally."

Here, Nichols finds it's the former and he puts it quite succinctly in a footnote: "There may be difficult cases in which it is hard to decide whether the government is indirectly regulating an activity, as opposed to incidentally burdening an activity to control some other regulatory object. But this is not such a case."

Nichols finds it undisputed that the ban would "prevent Americans from sharing personal communications on TikTok" and isn't convinced that such communication involves a "transfer of anything of value." He thinks that's best interpreted as the transfer of literal money instead of inferring that it means the communication itself is valuable.

"All postal, telegraphic, and telephonic communications transfer some value to the networks that facilitate those communications. Yet Congress still chose to protect those communications," he writes. "The phrase 'anything of value' cannot be expanded to reach beyond the participants to the communication itself, without doing violence to the structure of § 1702(b)(1)."

Modern technology doesn't change that equation.

"TikTok surely derives more value as a result of facilitating communications than 1977-era telephone networks and postal services. But that is a difference in degree, not in kind," writes Nichols. "To avoid rendering most of the provision inoperative, the phrase 'anything of value' must refer to the transfer of value between participants in a personal communication itself."

Nichols also found that the ban is barred by IEEPA's limitation regarding informational materials. With regard to the APA, courts are directed to set aside agency actions that are arbitrary or capricious — and Nichols finds the Department of Commerce failed to consider significant alternatives to the course of action it chose.

"Here, the Secretary did not consider any alternatives before effectively banning TikTok from the United States, nor did the Secretary articulate any justification (rational or otherwise) for failing to consider such alternatives," writes Nichols. He added that "one alternative is so obvious" it appeared in the department's own memo: ByteDance divesting. "Nevertheless, the Secretary did not consider making his prohibitions contingent upon the failure of the divestment process."

Nichols also found it's quite clear that TikTok would suffer irreparable harm absent an injunction.

"Functionally shutting down TikTok in the United States would, of course, have the immediate and direct effect of driving all existing and potential users to alternative platforms and eroding TikTok’s competitive position," writes Nichols.  "The nature of social media is also such that users are unlikely to return to platforms that they have abandoned. Thus, if the app was shut down (even briefly) but that shutdown was later held to be unlawful, TikTok would not be able to recover the harm to its user base."

The fact that another judge previously halted the ban in the users' suit doesn't remove that threat — especially since the government is appealing that decision. Meanwhile, despite acknowledging national security concerns related to China, Nichols finds that the government would not be harmed by the injunction.

Read the full decision below.