Donald Trump and his attorney generalare facing a lawsuit from retail investors in rival social media companies of TikTok, who are seeking to overturn the president’s approval of a deal for the app’s Chinese owner, ByteDance, to form a majority American-owned joint venture.
Filed on Thursday, this marks the first legal challenge to the agreement. The lawsuit contends that Trump’s approval last year contravened requirements established in a 2024 divestiture law. Two California residents, shareholders in Alphabet and Meta Platforms, initiated the suit with backing from the Public Integrity Project.
The legal action, which also names U.S. Attorney General Pam Bondi, aims to compel a renegotiation of the deal “that doesn’t put (Trump) administration allies in a position to censor political content on one of the world’s most popular media platforms.”
This lawsuit could bring greater scrutiny to the joint venture, which is considered crucial for TikTok’s continued operation in the United States and has drawn criticism from some lawmakers.
Brendan Ballou, a lawyer representing the plaintiffs, clarified that the suit does not seek to impose a U.S. ban on TikTok, an app utilized by 200 million Americans.
A law enacted by Congress in April 2024 mandated ByteDance to divest its U.S. assets by a January 2025 deadline, or face a ban or potentially billions of dollars in fines. Trump, a Republican who commenced his second term a day after that deadline, chose not to enforce the legislation.
Bondi subsequently informed companies that they would incur no liability for allowing continued TikTok use.
“The president is obviously violating the law,” Ballou told Reuters.
Proponents of the law, which was signed by Democratic former President Joe Biden, had cited national security concerns regarding the Chinese government’s potential access to data from millions of U.S. users of the popular short-video application.
The Public Integrity Project counts Democratic former U.S. Senator Russ Feingold among its members.
The Justice Department declined to comment on the lawsuit, while the White House and TikTok did not immediately respond to requests for comment.
ByteDance stated that TikTok USDS Joint Venture LLC, finalized in January and 80% owned by non-Chinese investors, would safeguard U.S. user data, apps, and algorithms through data privacy and cybersecurity measures. However, it provided limited details about the divestiture or financial arrangements.
“Under the announced deal, ByteDance would still control all the essential elements of TikTok. Such a deal would subvert the very purpose of the TikTok Law, as ByteDance could continue to push Chinese propaganda and censor the content it does not like,” the lawsuit asserted.
The joint venture deal represented a significant moment for the social media company following years of disputes, which began in August 2020 when Trump unsuccessfully attempted to ban the app over national security concerns. Trump last year declared that the deal satisfied the terms of the divestiture law.
