Lawyers and public relations firms, in order to earn money, may paint the odds of a lawsuit. But byte hopping companies must recognize that the odds of winning in the courts are not high, and may attract more pressure from the U.S. executive and Congress.
signed the administrative order in August 6th, requiring tiktok TikTok to switch hands in 45 days. President Trump issued an administrative order in August 14th to increase the chips, and the US Foreign Investment Commission (CFIUS) retrospective audit bytes beating in 2017 to buy. Musical.ly The company’s predecessor, Tik 90, is required by Tik in the United States Any data collected in the United States. In its second executive order, trump said: “there is solid evidence to convince me that byte skipping is through the acquisition of music social apps musical.ly Eventually, it will merge into a social media application, tiktok, which may take actions that are detrimental to the national security of the United States. ” < / P > < p > as CFIUS chairman, U.S. Treasury Secretary manuchin issued the legal basis for interpreting the second executive order: the Foreign Investment Commission “conducted a detailed review of the case and unanimously recommended that the president take this action to protect U.S. users from the use of personal data.”. < / P > < p > after the first executive order was issued, the byte jitter has indicated that it will file a lawsuit against the U.S. government. Now that the second executive order comes down, what is the basis of challenging the two executive orders through the judicial channels of the United States? What are the chances of success? < / P > < p > tiktok has become a recognized blockbuster for Chinese technology software in the United States. In May this year, tiktok had 119.9 million downloads worldwide, double the same period in 2019. In overseas markets with tiktok, India has 20% of the total downloads, while the US ranks second, accounting for 9.3%. According to data from Sensor Tower tiktok,
mobile terminal application market, in May, global revenue of jitter and TikTok exceeded 95 million 700 thousand US dollars, 10.6 times the same period in 2019, and won the world mobile app revenue championship. About 89% of the revenue comes from the Chinese market; the US market ranks second, accounting for 6.2% of the total revenue. < / P > < p > tiktok’s success has made it a thorn in the eye of American competitors and regulators. Last year, the U.S. Congress began a national security based investigation into tiktok. The two focuses of the survey are: content review system and personal information control. At the US Senate sub committee hearing on China and data security, technical experts pointed out that in addition to children, tiktok users include government or military personnel, as well as celebrities or personnel holding important positions in large companies. They are worried that the Chinese government will use this to grasp important information and deduce strategic information. At present, it seems that the purpose of Trump’s first administrative order is to “put extreme pressure on American buyers” and can be used as bargaining chips for American buyers to negotiate and negotiate prices, although the purpose of Trump’s first executive order is to agree in principle to tiktok’s change of hands. The second executive order, intended to put extra pressure on byte skipping, means clearly that unless it falls into the hands of Americans, they will kill tiktok. The legal basis of the first administrative order is the international emergency economic power act, the state of Emergency Act and section 301 of Chapter 3 of the United States Code. The international emergency economic power law explicitly stipulates that the jurisdiction of the government should exclude “any post, telegram, telephone or other personal communication that does not involve any value transfer”. Of course, whether the short video in tiktok involves “value transfer”, whether it only ends in “personal communication”, and whether it will be protected by this exclusion clause are all issues that need to be debated and interpreted by the court in the future. < / P > < p > the second executive order gives the U.S. government a more reliable tool of attack and defense, because if the first executive order is challenged by litigation, whether the ban on social software constitutes a deprivation of private property in violation of procedural justice has not been tested by the court. The second administrative order is based on the Cfius precedent and has clear legal procedures to implement, which should be more able to withstand legal challenges. The first executive order stipulates that the deadline for selling tiktok is September 20, while the second is November 12. Stuart Becker, former chief law officer of the US National Security Agency and assistant policy Secretary of the Department of homeland security, believes that the second executive order does not change the deadline for byte skipping divestiture of US assets. The imminent September 20 deadline is effective, while the November 12 deadline only means the result of stimulating another legal mechanism. In other words, the second administrative order is like the insurance policy of the first administrative order. It does not replace the first administrative order, but creates a second legal basis for the divestiture requirements and other implementation measures, so that trump can fasten the “safety belt” on the “sling” of the first administrative order. The Committee on foreign investment in the United States (CFIUS) is a committee of federal government agencies, which is responsible for examining the impact of foreign investment on national security in the operation or M & A of U.S. companies. CFIUS is presided over by the Secretary of the Treasury, and its members come from representatives of 16 U.S. Departments and agencies, including the Department of defense, the State Department, the Department of Commerce, the Department of energy, and the United States Department of homeland security, which has joined in recent years. CFIUS was originally established by executive order No. 11858 of President Gerald Ford in 1975 to study foreign investment. However, in the 1980s, because of concerns about Japanese investment (such as Fujitsu’s proposed purchase of ansom semiconductor), the US Congress passed the comprehensive trade and Competitiveness Act of 1988, also known as the “Exxon Florio amendment”, which authorized CFIUS to veto certain foreign investment transactions, thus giving the president the power to suspend or prohibit certain transactions. Between 2013 and 2015, 20% of CFIUS approval cases were related to China’s investment; from 2016 to 2018, CFIUS approved 169 China related transactions, accounting for 26.6% of all transactions. < / P > < p > < p > the Exxon Florio amendment is based on the national defense production act of 1950, section 721 of which was substantially amended by the foreign investment and national security act of 2007 (FINSA), and the foreign investment risk audit modernization act of 2018 (firrma), which came into effect on August 13, 2018, has expanded its jurisdiction. In other words, with the expansion of the definition of “national security”, CFIUS’s audit discretion is also expanding. < / P > < p > Trump’s second executive order of August 14 emphasizes tiktok (including the previously consolidated Musical.ly ）The business in the United States must be completely separated from byte skipping, including clearing the relationship with the subsidiaries, subsidiaries and Chinese shareholders of byte skipping, and byte skipping must prove in writing to cifus that the data related to tiktok’s business in the US has been destroyed. < / P > < p > according to the requirements of the administrative order, only U.S. citizens or entities owned by US citizens can be the buyers of tiktok’s business in the United States, and there should be no or have been any direct or indirect business, kinship or employment relationship between the buyer and byte hop or its management, employees or shareholders. That is to say, the buyer cannot be connected with the related party of byte skipping. < / P > < p > byte skipping requires the potential buyer to be declared to CFIUS, and the transaction can be completed only if no objection is received from CFIUS within 10 working days. Since the issuance of the administrative order, byte skipping needs to report to cifus the specific measures and schedule of tiktok’s divestiture in the United States every week, and cifus may appoint government officials to enter the enterprise to audit and supervise the progress of the sale by various means. The executive order also empowers the U.S. government to inspect or audit any information systems, networks, hardware, software, data, communications and property of the company or any of its subsidiaries owned or controlled by byte skipping or tiktok. < / P > < p > CFIUS started to buy byte hopping last year for us $1 billion in 2017 Musical.ly Even if the target of the acquisition is an offshore company established by the Chinese and based in the Cayman Islands. It is understood that byte jitter has not been reported to CFIUS during the acquisition process. There is a precedent for the US government to block mergers and acquisitions involving social applications. Last year, the U.S. government asked Chinese shareholders of Grindr, a gay dating app, to relinquish control of the company, citing social apps as a threat to national security. < p > < p > the byte skipping indicates that it will sue the U.S. government, which is obvious: as a negotiation strategy of M & A, the company should strive to complete the delivery within the time limit, and at the same time, it should reduce the impression of “urgent sell-off” and strive for the highest price. Zhang Yiming, founder of byte skipping, is facing great pressure in China. His international vision is challenged in the virtual world of “network Balkanization”. If no resistance action is taken, netizens will naturally think that he is easily “counselled”. Therefore, litigation can also help him tiktok the domestic negative public opinion and benefit the domestic market. However, if a lawsuit is filed, the enterprise will also face great risks. According to the procedure, a lawsuit can be initiated through the judicial system of the United States. According to the due process right granted by the constitution, the U.S. government can be accused of depriving private property of its unauthorized act of compulsory divestiture. In fact, the United States courts basically do not review the essence of executive decisions related to national security, but have the right to review the decision-making procedures. American judges generally do not challenge the definition of national security risk by the president and the executive branch. Moreover, as U.S. Treasury Secretary manuchin said, members of the Cfius Review Committee are right about byte hopping Musical.ly The decision on the acquisition is unanimous. The conflict between capitalism? Li Ji, the author of Chinese enterprises in the United States and a law professor at Rutgers University in the United States, said: “given the current situation, if byte skipping does Sue CFIUS, my guess is that the chance of success is very small. Having said that, good lawyers may still help. When Rawls sued the Obama administration, no one thought it could win the appeal. But they hired the best litigation lawyers in Washington, D.C., and won. Of course, the situation is not the same as before. The relationship between the United States and China is seriously worse than it was a few years ago. ” According to Lu Dan, managing director of Messina group, a Washington government affairs consulting firm, and former Deputy Assistant Secretary of international trade and Investment Department of the U.S. Treasury Department (responsible for CFIUS related affairs), Lu Dan believes that “CFIUS’s ruling on national security is almost impossible to be the object of litigation. The Exxon Florio amendment basically holds that the president’s decision does not have to be subject to legal review, but other factors (such as the government’s deprivation of private property) may give the plaintiff some room for debate. ” < / P > < p > on the other hand, the court experience of byte skipping will also bring other risks. Although byte skipping insists that tiktok’s North American server is not in China, the ban on tiktok makes its applications become the focus of public scrutiny in data cross-border, user’s personal information, speech review, big data push content, etc., and also become the object of litigation by tiktok users. < / P > < p > courts