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is not intended to be investment advice, or a recommendation of any stock or investment strategy. Learn more at Schwab.com slash thematic investing. Hello and welcome to Decoder. I'm Nilay Patel, Editor and Chief of the Verge. In Decoder is my show about big ideas and other problems. Today we're talking about TikTok. Specifically, the bill that would ban TikTok United States, unless Chinese parent company bytans sells it within a year.
Obviously that bill is a big deal, and it was clear from the start that TikTok will be fighting back. Last week, the company began the process of fighting back. It filed a lawsuit against the United States government claiming that the bill is unconstitutional.
A case the company has to win in order to keep operating in the United States under bite dance's ownership. In just a few days ago, a group of TikTok creators, funded by TikTok, sued the US government with variations in the same basic First Amendment arguments. These lawsuits are the entire ballgame at this point. Even if Donald Trump were to win the presidential election, he can't just undo a bill that has passed both houses of Congress and been signed into law.
So if bite dance wants to retain ownership of a TikTok, it remains operating in the United States. These lawsuits are really the way to do it. Given the stakes, I wanted to take some time to really think through the arguments in TikTok's complaint specifically. And I asked Verge editor Sarah John and Alex Heath to come on the show and help me pull it apart. We say this a lot, undecoder, but you really have to resist the temptation to think of the legal system like a computer.
It's just not deterministic in that way. You really can't predict the outcome of the case from the inputs. The loyering matters, the politics matter, and the actual human beings with all their emotions and weird ideas who decide the cases, they really matter.
So even if you think that TikTok bill is obviously unconstitutional or that TikTok is obviously a propaganda weapon aimed at our nation's teens, the specific arguments that are being made and how they're being made really matter if you want to understand the case. One reason I wanted to have both Alex and Sarah on the show is there's a lot of back and forth between the facts and the law here.
Some of TikTok's arguments are contradicted by the simple facts of what TikTok has already promised to do around the world. And some of the legal claims are complex and sit intention with a long history of attempts to regulate speech in the internet in this country. Alex has covered TikTok closely for years. So I wanted his perspective on the facts and Sarah is a former lawyer like me, so I wanted to talk through the legal issues in detail with her.
A couple things to note before we start. First, the most important argument TikTok makes in its complaint is that this law will straight up ban the company from operating in the United States. The rest of the arguments in the complaint really require you to buy that idea, which is pretty bold. Because what the law actually says is that TikTok has up to a year to sell its US operations to a non-Chinese owner.
And if it fails to do so, smartphone app stores won't be allowed to distribute it. I'm emphasizing this, and I'm saying it's an especially bold claim because President Trump also tried to ban TikTok during his administration. In TikTok worked out a fairly elaborate plan for selling itself. It involved a truly bizarre group of players, including Microsoft, Walmart, and Oracle.
TikTok averted that attempt to ban, mostly because the legal authority Trump was using for it was so shaky. But this time around, the bill is on far more solid legal footing. And TikTok has changed its argument, it's saying that divesting its US business is not at all possible commercially, technologically, or legally. This history and that shift are going to come up a lot in this conversation. So just take a second and recall how weird that period of time was.
You in the right headspace? Okay. The TikTok lawsuit. Here we go. Alex, Sarah, welcome to Decoder. Thanks for having us. Hi. There's a lot going on in this complaint, the TikTok filed against the government about this bill that would theoretically ban the company. It feels like the best way to go through it is to start with the facts. But before we do even that, I just want to get into basic dumb questions about this lawsuit.
Sarah, this case is captioned TikTok and bite dance versus Merrick Garland, who is the attorney general of the United States. As far as I can tell, Merrick Garland has no opinions on TikTok whatsoever. Why are they suing him? They're suing him in his capacity as the attorney general of the United States. So because they're suing over this law on First Amendment grounds, they're suing the government. And in this case, the correct person to sue is the head of the DOJ, Merrick Garland.
Is that just a formality? Is it like a weird esoteric thing about lawsuits? It's just a weird little thing. If they were suing DHS, they'd be suing the secretary of DHS. And then if that suit rolled over into the next administration, the case caption would change. And it would be a different attorney general that's on the case caption.
And then it's already in the court of appeals for the District of Columbia. That's the DC circuit court. That's just because the bill basically put them there, right? Yeah, it's just written into the law. That's where they got to sue. That's where it starts. Is there going to be the trial that we're going to see TikTok executives on the stand, talking about whether or not trying to control them?
I don't think so. I think we're just going to have a hearing. It's flexible enough that possibly they try people out or whatever, but there's not going to be a jury. There's not going to be a trial. We're going straight into the appellate section essentially. So we're going to have lawyers arguing in front of judges. And then the judges make a decision. And then it's definitely going to go up to the Supreme Court.
I want to talk about that move to the Supreme Court later because it feels like the fact that it's an ultra conservative six three court plays a big role in this. That's just what you might call the procedural posture if you're a lost in our lawyer. Here's how the case is situated. Here's who they are suing. Here's the court. It's in. Let's talk about the complaint itself, which rests upon one huge assumption, like a big hand wave, that this bill is straight forwardly a ban.
Even though the bill is written to say by chance, either has to sell TikTok US or leave those are its choices. But the first sentence of the complaint is Congress has taken the unprecedented step of singling out and banning TikTok. The argument fundamentally is that it is impossible for bite dance to sell TikTok US. And therefore it's a ban, even though the bill itself presents this as a choice.
Alex, you have been covering TikTok for a long time. There's been a lot of weirdness about TikTok's ownership and its operations. Does that argument hold up to you? No, I feel like we've entered some kind of warped time hole and we are forgetting what happened the last time the government tried to ban TikTok. No, it doesn't make sense at all. The last time was much weirder. Trump was on a plane and he got mad and just tweeted, I'm banning TikTok.
And then the government tried to retcon that into law. And there was this furious scramble. What happened there just for fresh people's memory? There was this plan called TikTok global where because bite dance, the parent company of TikTok is actually majority owned by American venture capitalists and investors, they were going to essentially do a joint venture and spin off TikTok from bite dance with a new cap table, a new board of Americans.
TikTok app globally would be its own company. So it would be detached from bite dance. It would eventually IPO than the investors who have plowed billions of dollars into bite dance. Some of them incredibly influential donors and lobbyists in DC like Jeff Yass could have liquidity and TikTok could continue to exist while satisfying the government's request that China divest majority ownership.
And then the government will be the path that they took with Walmart and Oracle. If the last ban attempt under the Trump administration successfully went through, they ended up not having to do that because they successfully challenged the executive order on first amendment grounds.
Obviously the details are very much different this time, but there's a lot of either or false arguments happening in TikTok's complaint, I think, because they're acting like all they can do is spin TikTok the US app off and cut it off. They call it an island that would not work because you wouldn't be able to see or interact with people on TikTok from other countries.
And that's not at all what they were proposing to do just a few years ago. This is the foundation of the complaints argument, you have to accept that this bill is a ban and then everything else follows from there and TikTok gives three reasons in the complaint that it's a ban they say divest sure is not possible commercially technologically or legally, which seems like we should just take those in turn.
Conversely is what you are saying here's a quote from the complaint spinning TikTok US off that would turn us TikTok platform into an island where Americans would have an experienced attached from the rest of the global platform and so for one billion users such a limited pool of content in turn would dramatically undermine the value and viability of the US TikTok business.
Does that hold up like a there's no way to do this without completely detaching it from everything else and be if it became this island, it would fail because Americans test what you want to watch international content.
No, and the government's not asking them to do this. They have to say this is what will happen because if they come out in this complaint and they say if we don't do this, we'll have to do the incredibly intricate JV plan that we publicly propose just a few years ago to fully spend ourselves out.
It's like why are you doing the complaint in the first place like you just have already shown there's plenty of evidence that you are very much prepared to spend this thing out in a way that we keep TikTok functional globally and would detach it from being majority owned by bite dance. So they're presenting this new third option that no one asked for the government is not mandating all this bill does is say that you can't be majority owned by China.
And they are doing that because they I think have to they're backed into a corner if they come out like I said and say, you know, if we don't we'll have to do this TikTok global plan again. It's like, yeah, that's the point. Sarah, this is what I meant about a trial, right? These are facts like this is something you have to establish. Here's some evidence that you have this other plan. Here's your claim that this is impossible.
At some point that is straightforwardly a finding of facts someone has to decide what's true and what's not true. And then the public courts tend to apply this facts to the law. Where does that happen here if there's not a trial or a jury? Does the judge just say I don't believe you. I think it might be similar to what happened in Reno V. Celieu is a first amendment case. It had to do with a law passed by Congress that would have imposed significant restrictions on the internet.
Because it was very fact heavy. They had a special masters trial where it wasn't a real trial, but they were essentially bringing in witnesses and having hearings. And you had a special master who found findings of fact and those got submitted up to a higher court. Amazing. So that's commercially is it viable to split off TikTok US TikTok is saying no. There's some history that they were already prepared to do it.
That history might trip in a trial or a special masters hearing the second argument they're making is technologically impossible to split off TikTok the argument in the complaint is look by dance wrote all this code. It is a huge base of technology that runs TikTok. And if you spin off into some other company. You have to hire some people and they won't even know they're doing it. Here's a quote to comply with the laws to vestershire requirement.
The code base would have to be moved to a large alternative team of engineers. A team that does not exist and would have no understanding the complex code necessary to run the platform. It would take years for an entirely new set of engineers to gain sufficient familiarity with the source code to perform the ongoing necessary maintenance and development activities for the platform. That's the argument you have to spin up a new team of engineers they have no familiarity with this code.
It's going to take forever and it's just going to fail at a technological level. Is that that seem like it's reasonable Alex. That's even less reasonable than the first one. That one's the most logical to me is like who's going to run this thing? So who are the people? So in February of 2023 I wrote about this in the verge we have a big photos for this thing that TikTok called its transparency center in Los Angeles.
This was when they were proposing the TikTok global oracle spin off and they were sequestering all of the US data on Oracle servers or beginning to and I remember literally walking in and it was like the Wizard of Oz in the back. There was like this room that they wouldn't let us go in and they were like that's where the source code is.
And we put it there so that we can have auditors that the government approves come in and look at the source code and we've been pulling out everything and siloing it with Oracle so that we are totally above board. There's absolutely no data leakage. Unfortunately here with the second argument TikTok has reams of public comments over the last couple of years talking about how they have in fact worked very hard to separate the code of TikTok from my test.
To the point where they literally brought journalists like me and pointed again like to the back room of Wizard of Oz or something and said there's where the code is. So I don't buy this at all they have to say this as well right you have to pretend that this is some kind of undue burden on them to do but it's like you said you were already going to do it. So why is it now an issue?
There's a lengthy section of the complaint and it comes up throughout the complaint actually that TikTok was already in the middle of a deal with syphias the committee and for investment in the United States to have all this auditing. There's project Texas which is what you're describing or Oracle was actually going to run TikTok. I guess my opinion of project Texas was it was always a head fake like it was never actually real.
The facility went to Iowa thought was all for show and none of it ever made any sense and there's been some reporting that it was all for show China still was very much in control by chance which was still in control of TikTok am I to read this is hey this is actually real. And it turns out like you're just ignoring it now or is this more like. It was actually pretty much for show and we don't actually have the capability to split this technology out what's real is that.
TikTok has paid Oracle hundreds of millions of dollars in the last couple of years what they were paying for not really sure because it hasn't gotten them out of a ban. This was supposed to be the thing that syphias would accept to keep them from having to divest originally. I have heard a lot of things about project Texas there's been a lot of other reporting about how kind of a smoke screen it is it's kind of like if you're a student and you're paying your teacher to grade your homework.
Should anyone really trust that the grade you're being given is the accurate one there's an inherent tension there which is that TikTok is paying this entity to validate its existence and the whole point of that was that if Oracle were to see something like some kind of back door. It was going to be where Oracle is literally approving the app updates in the app store so like if you went to TikTok in the app store it would be by Oracle.
So it's going to be on Oracle to report if something happened do you really want to do that when this is like a massive contract that you're making hundreds of millions of dollars from and are the incentives aligned there. So it was always a pretty tenuous setup beyond the technicalities of it just the incentives of it alone. We have to pause for a quick break we'll be right back to getting to the third reason TikTok says it can't divest and argues that this bill is effectively a ban after all.
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We're back with virgin editor Sarah drawing Alex heath digging into what the tiktok van really means and what tiktok suit against the government really says we just talk about tiktok's first two arguments for why can't spin out its US business first because it wouldn't be commercially viable to isolate the US market and second that it would be technologically impossible even though tiktok developed a robust plan during the Trump administration for how that might work.
The third argument in the complaint about why this is a ban and why divestors impossible is legal. The argument is China will not let them sell the recommendation algorithm and the recommendation algorithm is the heart of the tiktok experience the quote is straightforward. The Chinese government has made clear it would not permit a divestment of the recommendation algorithm that is key to the success of tiktok in the United States.
This is at least a little funny right you've got this like huge lawsuit against the United States government saying you are stepping all over our rights and one of the reasons are stepping all over rights is the Chinese government has already stepped all over our rights. Everything about this is a circle the tight next word controls that will likely prevent China from letting bite dance let go was a direct response to Trump.
One thing after another we tetrist our way into this impasse where like bite dance shows up in court and has to. Contort themselves to say that you can't do this to us because this other government is already doing this to us it's incredible it is very funny when you're thinking about the six three ultra conservative Supreme Court. I just can't imagine Neil Gorsuch being like you know you're right China has restricted the sale of the algorithm that isn't just doesn't seem likely to me.
I mean it's a very like damned if you do damned if you don't and that's very much the case with the technological argument as well where if they did succeed with project Texas then what's the big deal if project Texas was just for show. Tiktok like they have to admit that their whole thing was just for show right and it's the same thing here OK so you are effectively controlled by the Chinese government is that what you're saying.
Courts love to concede things to the government when there is a national security interest and bringing the fact that China is going to effectively ban them from selling software is yeah that's a hysterical thing to put into this case.
China has a deep interest in the strike foundation algorithm that you are worried is a propaganda tool the Chinese government is a circle that you don't want to close right you don't want any judge to make that connection and they have put it right in the complaint. That said.
Tiktok works without its algorithm elsewhere right out there is already a Tiktok without this algorithm out in the world serving millions of people yeah unclear how many have opted into it I wrote about this in command line recently Tiktok has a technical out here thanks to the Europeans so because of regulation the DSA digital services act in Europe it requires companies meeting a certain threshold of users to enable their users to turn around.
Personalization to turn off the algorithm in the app this has actually been according to my sources a pretty substantial technical lift inside by dance that has been going on for the last year or so they recently rolled it out they made a public post about it and what happens is you turn it on and Tiktok basically becomes a glorified cable channel it's a basic have or have not waited thing with stuff that's going viral around you there's no personalization.
And I think if we were having this conversation four years ago I think it'd be a little more valid to say look is it really feasible to sell Tiktok without the algorithm these days these kinds of personalization algorithms that by dance pioneered for Tiktok have become increasingly common and there would be a lot of American companies I think and my sources think they could come in and slap a new algorithm behind this thing you've even had people I don't want to give validity to this but people like Steve Mnuchin coming out.
And saying they would buy it without the algorithm which the sea Mnuchin angles hold there is multiple fronts considering he was in charge of syphias during the Trump administration but yeah it's not that big of a deal to separate it from the algorithm and China will do whatever once and they may say look we don't want to you to sell it all it's a national pride thing we don't want to get in this tit for tat we don't want the US telling us what to do.
But really all they've said publicly is that they would block the algorithm and I actually think that'd be okay. My question is whether the this version in Europe like you can't have content without content sorting whether it's naive or not is if it's not a personalized recommendation engine but it's a recommendation engine who owns that IP is that a bite dance joint is that also subjects to Chinese export restrictions like I think that the export controls are going to span a lot of software and that is not a big deal.
So I think that's a big deal to have software and that a lot of that software is going to be hard to extricate from itself and I think that there's going to be big parts of this company is assets that they will actively block from export.
Yeah I mean my understanding is that it's the algorithm and so there is no algorithm when you turn this off in the EU it's a rules based system so it is still machine learning but it's not personalized so that's what the algorithm does the people who build it are tasks. With building the most personalized recommendation system ever for each person that's the key thing that led tick talk to be as big as it is and it's what China is trying to block.
And what you would buy here in the United States is a huge user base which is very very hard to get right like you buy yeah you'd buy a front end app with a big user base and thanks to what they've already done in Europe again it's almost like we're burning the cable TV.
What's funny about all this is that a lot of the influence stuff that we talk about with like how could China come in and heat certain things in the feed which is what they call it tick talk when they boost certain videos or types of content that actually doesn't happen at the algorithm layer because the algorithm is purely math about making personalized recommendations.
That happens at the content moderation layer that's totally separate from the algorithm so blocking the algorithm doesn't actually do anything about the CCP telling a certain team to heat certain videos.
There's just not a lot of evidence for that either way there's a lot of people who believe it might be happening there's a lot of people who deeply ideologically want to believe this algorithm is totally neutral will come to that because it is important in how the rest of this complaint is formatted.
But I just want to stay here for one second the whole complaint rests on the idea that this bill is a ban and its arguments these are the three arguments right commercial technological legal we've gone through them you add them up is this definitely a ban is it definitely impossible to sell tick talk because if if it's possible the sell tick talk and operate.
Then I feel like the rest of the complaint almost falls apart because there's no consideration of what happens if you make a solid there's a lot of talk about what happens if you ban it in fact what explicitly says this act bands tick talk several times throughout the complaint. So what do you think is it definitely a band is that argument seem like it can withstand the scrutiny or not.
I'm not sure the law weirdly names tick talk right like that is one of the weirdest things I've seen in a law it's not just saying wink wink nod nod apps of this many users that are also majority owned by a company that is owned by a foreign adversary as approved by the president right just literally says tick talk in the bill.
It does feel really targeted at restricting tick talk and restricting speech on tick talk I'm not sure that all of this hinges on whether or not it's a sale or a ban there is quite a lot around this case that strongly suggest this is a law that is about speech.
But yeah judge could also just interpret it is like what are you talking about this is a force sale this is nothing to do with a ban and in fact strict scrutiny isn't even applicable here that first part do we have to get to this is definitely a ban you're saying maybe not.
And I think that's important to establish Alex. What do you think I just and confused why is this complaint not fully focused on the first amendment issues and I'm pretty substantial public statements that members of Congress made being clear that
though this bill has a veneer of not being focused on tick talk it absolutely is and it absolutely as need I was saying is about speech issues I mean you have members of Congress saying we hate the amount of like pro Gaza content on the talk right so why does the complaint not lead with that why are they doing all these like it is but I'm just these either or is that we've been going through of the it's not commercially possible it's not legally possible it's like no you actually already
said yourself on all of these points because you almost did this a couple of years ago so I'm why are they contorting themselves over that instead of focusing on what seems like the heart of the case they have which is that they're being unduly targeted over speech issues that seems like more of a win for them.
And actually just an adequate number of pages has been a lot of to each little branch of their argument the speech thing it's there but doesn't take very long for them to unpack the speech thing whereas it takes quite a long time for them to unpack why they're saying it's a ban and not a sale. I think that they've trimmed down to as few words as possible but in the end it's just a much more complicated idea.
So the great entry point into the actual legal arguments of the complaint there are four of them violation of the first amendment bill of a tinder which means you've actually target us with the law which the government's not allowed to do violation of equal protection and unconstitutional taking those are all constitutional law arguments but to me just broadly the heart of the case is as you're saying Alex the first amendment claim the others are kind of along for the ride right at the courts don't find the big for the right.
And so it's a lot of the courts don't find the big first amendment violation it seems to me at least very unlikely that they're going to find some technical unconstitutional taking argument and give tick tock a win on the rest. So does that read is out of bounds to you because I read this sounds like yeah you need a bunch of stuff you need a big constitutional argument but the heart of this is the first amendment claim.
Yeah I don't think there are other claims matter there are different standards that courts used to evaluate first amendment claims there's an immediate scrutiny there's tricks scrutiny they all have different ways of thinking about. Government speech regulations tick tock says this should fall under what's called strict scrutiny I tend to agree with that Sarah sounds like you tend to agree with that really quickly explain to people what strict scrutiny is.
So strict scrutiny is the highest level of scrutiny that you apply to a law when you're judging whether or not it's constitutional and it is that the government must have a compelling interest in creating this law and the law must be narrowly tailored to address that compelling interest.
So a quick list of compelling government interests like preventing sex discrimination national security it like it has to be kind of a big deal the law can't be too broad if it's too broad then it's no longer a compelling state interest because you're just covering way too much stuff it's also not narrowly tailored so you're just failing strict scrutiny overall.
The idea is that when something hits a right that's as important as the first amendment the law had better be very good at what it does.
So there have been attempts to regulate speech in the telecom context at different points in history you mentioned Reno V ACLU which was the communications decency act in the 90s which was basically don't have porn on the internet that got struck down under strict scrutiny very quickly explain that one because I think the idea that we don't just regulate speech in the internet is that it's not a good thing to do.
So the way that you're going to regulate speech in the internet is I think people take it for granted but we actually went through a Supreme court case in the 90s that made that true under strict scrutiny.
Reno V ACLU comes out of a 90s internet porn panic and Congress passed the Communications Decency Act which included a bunch of restrictions on what we would call platforms these days the internet was much more decentralized that created like certain affirmative obligations it was considered just to be a law that was a little too much there was a compelling government interest in protecting minors but it was not narrowly tailored enough and it was just a little too broad.
Alex I want to come back to something else you mentioned which is all of the stuff members of Congress have said about this bill right they have said boy there's a lot of pro Palestinian content on this app now that there's a war in Gaza the young people are furiously opposed to that's bad we should shut time tick talk and they're just out there saying that like
our own reporters have heard that we've dug it up that there's more reporting out there I don't love that but then there's the fact that tick talk has to go in front of a six three ultra conservative court that pride itself on textualism and Sarah feels like the jump from
the bill which you should evaluate on its face is evidence of what Congress wanted and now you have to leave the text of the bill to talk about what Congress said outside of the bill itself that's a hard road with a court like ours isn't it.
First amendment cases I think that you don't really 100% stick to the text of the bill you've got to establish compelling state interest and that means that you've got to sometimes go outside the bill and really hash out that compelling state interest we are looking though out of conservative court and as strong as the first amendment is courts love national security and conservative
justices really love national security so I do briefly explain to people what textualism is in this context so textualism is a fetishism of the dictionary it is a judicial doctrine where the way in which you interpret a law is to not look at the congressional record you don't look at news reports around it you don't look at context essentially and you look at the text of the lot itself
and to find the meaning of specific words you go to dictionaries essentially and you go to dictionaries that are dated to when the bill was written so when you see sort of textualists like Scalia for instance really go to town on wording in a lot they will go
to the webster in this year said and it's the most annoying thing humanly possible prior to the rise of textualism judges would look at the congressional record a lot and one of the things that this resulted in actually was this gamesmanship where legislators would drop things into the congressional record knowing that it might come up in court later which was not great because they couldn't get into the bill but they could definitely get into the congressional record
so in a way like I see the textualist point but I also hate them we have to take another quick break when we're back Alex Sarah and I get into why the current makeup of the Supreme Court is so important to the future of this case this week on the pitch we're back to pitches and this one's coming from my job what podcast AI does is it lets podcasts producers become ten times more productive how much are you charging the pitch?
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we're back with verge editors Alex heath and Sarah John we've been walking through tiktok suit against the United States and now it's gotten to a complicated place the supreme court Sarah just explained textualism which the late justice Antonin Scalia was pretty famous for
many of the six conservative justices who make up the court take textualism even farther we have the children of Scalia at the supreme court now there are like four steps beyond Scalia in terms of their commitment to textualism
and the argument here is you have to go to the congressional record like look at all this stuff they were saying outside of the bill look at all the stuff they were saying outside the halls of congress even the complaint says the act lacks any legislative findings or statement of purpose so petitions and more than 170 million american monthly users of tiktok are left to scrutinize statements from individual members of congress and other sources to try and discern any purported justification
for this extraordinary intrusion onto free speech rights yeah I believe them that's true that's what we have had to do it feels like our supreme court there's a real chance the children of Scalia are going to say yeah but we have a bill the bill says what it says and that's fine is that tensioning and the results here do you think they'll convince the sort of textualists to go into the government record yeah I think that they're going to show compelling government interest in making this law
and I think that the thing that they're going to lean on is national security and in order to lean on national security they're going to have to introduce stuff from outside of the bill there are no findings in there that establish that there is a national security interest in this bill
so I think they're going to have to go outside the bill and you're outside the text to me this is going to be one of the weirdest parts of this entire lawsuit is that tension because that Supreme Court does not want to do this and that I think they're going to have to so that's the first argument right you targeted us specifically that's weird you've barely even explained your compelling government interest which strict certain year acquires
then there's this sort of core first amendment claim that I think most people would into it hey you're stepping on a bunch of people's first amendment rights here they were speaking on this platform and if this is a ban as we believe you're going to shut them all down does that make sense here Sarah that tick tock can step in for the rights of its 170 million users because you have to accept that I don't have a good answer for you on that one first amendment cases are weird with standing
and so I just don't know the answer to that off the top of my head the other argument here for just like the core first amendment to me makes more sense it's that the government is restricting tick tock's own speech the complaint trust to do a little apple pie move it's like tick tock loves to support small businesses that's our own speech we love motherhood we like do mothers day on tick tock that's our own speech you're restricting our own speech
that makes sense to me right congress is shutting down a platform on which tick tock itself speaks but it's a little circular right it's not a legal restriction on speech it's a restriction on a speaker but we're the speaker that owns the platform is that powerful enough it feels like a judge is going to be like yeah the government is restricting your speech because you are a foreign adversary power and that's fine again it's so hard to tell which direction the court is going to go here
because you're talking about to extremely powerful interests like we've got free speech and we've got national security national security and they're just going to do get out and I don't think we've ever seen a case that where it's like quite like this
the last one I want to talk about and then I want to actually spend some time on what happens next tick tock points out that there's no evidence of bad things right that you can't have a compelling government interest in restricting bad things without evidence of bad things
the quote from the complaint is congress itself has offered nothing to suggest that the tick tock platform poses the types of risks to data security or the spread of foreign propaganda that could conceivably justify the act and then it goes on to say speculative risk of harm is simply not enough
when first amendment values are at stake these risks are even more speculative given the other ways the Chinese government could advance those asserted interests using a variety of intelligence tools and commercial methods I don't know why they put that sense in there to be like the Chinese government could disrupt this next election already using their existing espionage tools and their existing ability to buy Facebook ads or like whatever you're going to do to do for election interference
you haven't even shown their doing it on on on tick tock you can't pass this bill again I would not have put the part about the Chinese government being able to do it anyway in there but the argument is you can't regulate this in this way when you haven't proven that we're doing the bad thing
I see both sides of this argument right one is yeah the government should have definitely laid out its evidence which it did not do and on the other hand it's well it's national security they probably don't want to say about stuff also if you believe the bad thing could happen should you not take steps to avoid it should you allow the bad thing to happen first you can say look at the bad thing and then you'll have the political capital to stop it
how does this one works there do you have to have the bad thing happen before you can regulate it but I think that tick tock suspects and certainly reporters suspect that the government doesn't have very good evidence of the bad thing
we've got those close hearings and I think that if those close hearings were published I'm not sure they would be all that persuasive and they don't have to like make that part public like a court can look at that evidence without having to air it out to the entire world right
it is just true and I think it is a mistake on the part of our legislators to have never laid out this evidence like we just don't know I don't think there is any I really don't like I mean why if there was evidence why would they not lay it out it's because they don't have it fundamentally if we can get to the actual issues before we litigate a bunch of procedural things
and technical foundations of standing like we can get a pass that we can get to the actual substantive issue which is can you demonstrate the compelling national security interest and that this bill is an early tailored to stop it by saying you have to sell this company or go away
that will be the heart of it and I think Sarah what you're saying is the court might take all of that in secret it might look at that all that privately and say here's our decision it's under seal because of national security and we might never actually know the answer yeah that is entirely possible we might also just get like a blurb and then just like by the way there's all this other stuff that we've submitted to the court that's going to be under seal
and then we just get a real broad overview I think that eventually we will find out what was in those close hearings and I think it's going to be underwhelming we're all going to be like really that's it tiktok is bringing the stuff up because they have a strong suspicion or they even know that those close hearings way in their favor really all right let's talk about what happens next so I think all this agree this is tiktok's only shot
they're either win this lawsuit or they got to do something and it sounds from all the noises are making now like they will actually walk away they will shut down tiktok and leave the United States Alex do you think that's a bluff do you think that they are working on a last minute deal
they're at least investigating the possibility of this stuff there's just too much money at stake here for this to be the outcome that they just leave I think they would probably like to do that but something I've heard about the US specifically for tiktok
they did this in India right they left India tiktok was fine the US is most of their inventory so most of the content that gets made for the service so they're really cutting the product off like at the root if they fully leave the US and beyond the cultural geopolitical implications
I think what will most likely happen is some version of what almost happened during the Trump administration which is some kind of tiktok global spin off IPO new cap table and if they can still let bite dance have some involvements that should not fully appease everyone but appease the key players enough the very very wealthy American investors invite dance we have a lot of political capital and DC are not going to let their billions of dollars just go up in flames
so the money always talks geopolitical posturing aside there's a lot of money here Sarah what's the timeline here a year five years what kind of timeline are we looking at for resolution for resolution it's going to be after the election so once Biden signs the clock started ticking
I imagine at some point a court might be like we're going to freeze the clock either way is like nine months plus an additional three months if a sale is satisfactoryly underway stuff might happen after the election question mark although I don't know why that would be the case given that the alternate presidential candidate is the one who started all of this to be in this well Trump is notably flop right which is really interesting
yeah whatever but he's notably flip flop you have to imagine by dancers staring at this election right now and being like we hope the guy who flip flopped and wants us to stay is going to win but what's he going to do it's a congressional bill gets passed both chambers
and it's signed into law it's a law now you're going to really rush another bill through both chambers and then sign it to repeal the previous bill in time like I think that they're like hoping that something changes in the interim but it does seem very much a long shot there
basically nothing happens with the outcome of this case in the legal system nothing happens on the sale timeline we're into next year before there's any movement with TikTok in that state I think that's probably the case yeah
Alex do you think that they will make any moves towards a TikTok global kind of plan in that in that timeline or you think they're just going to do it in the background while they wait to see what happens with the election you have to have a parallel track I mean I know that Cho Choo the Tix-OXIO is
been privately saying in the last couple of weeks we are absolutely not going to sell that you have to say that you know this is like leverage 101 you never want to be the one that's making it clear that you have no options so they will feign indifference and bivalence until they can't
and if this deadline is quickly approaching they're not making any headway on the legal case they will have to do something so this to me is the only other option betting it all in a case that is constructed this way it feels risky to me and I really think like the new electric G-wagon is out
it costs a lot of money you can't light all that capital on fire if you're kind of going to G-wagon that's literally how I think the money talks in this case all of these people would rather have the cash than an idealistic victory over the Chinese or the American government
who can buy and sell what but we'll see yeah but it's trying to get them let themselves that to me is really what it boils down to I think China would literally like their cash on fire rather than like let the United States get one up on them
by chance of course doesn't want to light its cash on fire but I think the Chinese government is totally okay with lighting other people's cash on fire things again to Alex and Sarah for joining me on the show these TikTok cases are going to be quite the saga
and like I said we're going to spend quite a bit of time over the next year tracking the development in these cases if you have thoughts about these episodes or what you'd like to hear more of you can email us at decoderattheverish.com we really do read all the emails
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