Trump and Bondi Face Lawsuit Over TikTok US Asset Sale Approval

• Congress passed legislation in April 2024 requiring ByteDance to sell TikTok's U.S. assets by January 2025 or face a ban and potentially hundreds of billions in fines, but Trump declined to enforce the law.
• The approved joint venture is 80% owned by non-Chinese investors, but the lawsuit claims ByteDance still controls essential elements like algorithms and content, enabling Chinese propaganda and censorship.
• This marks the first legal challenge to the deal involving TikTok's 200 million U.S. users, and could reveal details about the joint venture structure that has faced criticism from lawmakers.

Trump and Bondi Sued Over TikTok Asset Sale Approval

Key Development:

President Donald Trump and Attorney General Pam Bondi face a lawsuit challenging the U.S. government's approval of ByteDance's TikTok divestiture deal, filed March 5 in the U.S. Court of Appeals for the District of Columbia.

Legal Challenge:

The Public Integrity Project, representing two U.S. retail investors in rival social media firms, alleges the approved deal violates a 2024 congressional law requiring ByteDance to sell its U.S. assets by January 2025. The lawsuit seeks renegotiation but does not demand a TikTok ban.

Deal Structure:

ByteDance established TikTok USDS Joint Venture LLC, finalized in January, with 80% ownership by non-Chinese investors. However, plaintiffs argue ByteDance retains control over essential elements including user data, apps, and algorithms, potentially allowing continued Chinese propaganda and content censorship.

Background:

Congress passed legislation in April 2024 mandating the sale or facing a ban and potentially hundreds of billions in fines. Trump chose not to enforce the law, while Bondi assured companies they would face no liability for continuing TikTok operations. The platform serves 200 million American users.

Market Implications:

This marks the first legal challenge to the joint venture deal, which is critical to TikTok's U.S. survival. The lawsuit could force disclosure of previously undisclosed financial arrangements and ownership details. The case has drawn criticism from some lawmakers concerned about national security risks and foreign influence on a major social media platform.

Status:

The White House, Justice Department, and TikTok have not commented. Trump maintains the deal satisfies legal requirements.