U.S. Supreme Court agrees to hear challenge to TikTok divestment law

The Supreme Court on Wednesday agreed to hear arguments by TikTok that a law that could lead to a ban of the popular social media app violates free speech protections in the U.S. Constitution.

The Supreme Court scheduled oral arguments in the case for Jan. 10, nine days before the law, formally known as the Foreign Adversary Controlled Applications Act, is set to take effect.

The law would require TikTok’s Chinese parent company ByteDance to sell the app or force Google, Apple, and other platforms to stop supporting the app in the United States.

Congress passed the law due to concerns that TikTok’s Chinese ownership presented a national security risk.

The U.S. Court of Appeals for the District of Columbia Circuit upheld the law on Dec. 6, ruling that the DOJ had “offered persuasive evidence demonstrating that” the divestment law “is narrowly tailored to protect national security.”

TikTok has said that if the app is banned, small U.S. businesses that use TikTok for marketing would lose more than $1 billion in revenue in the month following the ban, and that people who create videos with the app would nearly $300 million in earnings.

The Supreme Court’s announcement Wednesday that it will take TikTok’s appeal came two days after the company filed a petition requesting an injunction against the law taking effect next month.

The court in its order directed the company and the Department of Justice to brief and argue the question of whether the law as applied to TikTok “violates the First Amendment” of the Constitution.

TikTok in its request to the court had said, “Congress’s unprecedented attempt to single out applicants and bar them from operating one of the most significant speech platforms in this nation presents grave constitutional problems that this court likely will not allow to stand.

TikTok did not immediately respond to a request for comment Wednesday from CNBC.

A lawyer for Sen. Mitch McConnell of Kentucky, who is the leader of the Republican caucus in the Senate, in a filing Wednesday at the Supreme Court opposed TikTok’s application for an emergency injunction against the law.

McConnell’s filing said that “TikTok clearly hopes that the” incoming administration of President-elect Donald Trump “will be more sympathetic to its plight than the incumbent administration” of President Joe Biden.

“In other words, delay is the point” of the injunction request, McConnell’s lawyer Michael Fragoso argued.

Trump met with TikTok CEO Shou Zi Chew at Trump’s Mar-a-Lago club in Palm Beach, Florida on Monday, the same day that the company asked the Supreme Court to take its case.

Trump earlier that day told reporters, “We’ll take a look at TikTok,” when asked about the potential ban.

“You know, I have a warm spot in my heart for TikTok,” Trump said, suggesting that the app had boosted support for him from young voters during the election in November.

Jeff Yass, one of Trump’s major backers, is the co-founder and managing director of Susquehanna International Group, a significant investor in ByteDance.

McConnell’s lawyer Fragoso, in his filing Wednesday, wrote, “Senator McConnell urges this Court to deny TikTok’s emergency application.”

“Their First Amendment arguments are meritless and unsound. While the forced divesture may cause them irreparable harm, any delay caused by an injunction would be contrary to the public interest,” the lawyer wrote.

“This is a standard litigation play at the end of one administration, with a petitioner hoping that the next administration will provide a stay of execution. This Court should no more countenance it coming from foreign adversaries than it does from hardened criminals.”

– CNBC’s Lora Kolodny contributed to this article.

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