TikTok Faces Lawsuit Threat in US: "We Won't Leave" ... EU Halts Compensation

Chinese company ByteDance's video-sharing platform TikTok announced on the 24th (local time) that its CEO would initiate a legal battle following the enactment of a law mandating the forced sale of its U.S. business.

TikTok CEO Zhu Shouzi said in a video message immediately after U.S. President Joe Biden signed the forced sale bill, "Rest assured. We are not going anywhere," adding, "The facts and the Constitution (the U.S. Constitution) are on our side, and we will win again."

[Image source=AP Yonhap News]

This appears to imply that TikTok will file a lawsuit challenging the constitutionality of the forced sale law. TikTok has previously argued that the forced sale law violates the First Amendment of the U.S. Constitution, which guarantees freedom of expression.

The bill related to TikTok's forced sale, passed by both the U.S. House and Senate, requires TikTok's parent company, the Chinese firm ByteDance, to sell its U.S. business within 270 days (with the president allowed a 90-day extension). If the sale is not completed within this period, TikTok's services will be banned in the U.S.

While TikTok has taken a strong stance in the U.S., even threatening litigation, it has retreated in the European Union (EU) amid regulatory investigations. On the same day, TikTok announced it would temporarily suspend the 'reward program' of TikTok Lite in the EU.

Through X (formerly Twitter), TikTok stated, "TikTok always seeks to engage constructively with the European Commission and other regulatory bodies," adding, "While addressing the concerns they raised, we will voluntarily suspend the reward feature of TikTok Lite."

This announcement came just two days after the European Commission announced on the 22nd that it had launched an investigation into TikTok Lite for violations of the Digital Services Act (DSA). The Commission pointed out that TikTok Lite's reward program, which allows users to earn points by watching videos, clicking 'like,' or inviting friends, failed to conduct a prior assessment of addiction risks, thus violating DSA regulations. The Commission also warned that if corrective measures were not taken by that day, it would impose a temporary ban on the reward program across the EU.

Separately, the Commission warned TikTok that it would impose fines if a prior risk assessment report was not submitted within 24 hours; TikTok submitted the report on time the previous day.

While TikTok strongly opposed the U.S. measures, it appears to have taken a step back in the EU, where the investigation is still in its early stages, likely due to concerns that unnecessary provocation could affect its European operations.