The D.C. Circuit Court can’t let the CCP misuse our Constitution.
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The information wars are upon us, and our enemies are leveraging our reliance on technology to get the upper hand. Nowhere is this threat more apparent than concerning TikTok, the video sharing app controlled by ByteDance, which has ties to the Chinese Communist Party (CCP). In response to this threat and others from foreign adversaries, Congress passed the Protecting Americans from Foreign Adversary Controlled Applications Act (the “Act”) that would impose foreign ownership rules on mobile apps owned and controlled by the governments of China, Russia, Iran, and North Korea that pose a national security threat. It also forces ByteDance to divest from TikTok or face a full ban in the United States.
Within weeks of its passage, TikTok sued the U.S. in the D.C. Circuit Court, alleging that the Act is unconstitutional, which is a strange posture.
The legal pathway the Act takes is, frankly, a well-worn one to address national security threats in the communications sector. The precedent dates back to our nation’s founding. Alexander Hamilton cautioned about foreign interference and its danger, darkly predicting that “foreign powers also will not be idle spectators,” in American affairs. Instead, “they will interpose, the confusion will increase, and a dissolution of the Union ensue.” Skepticisms toward foreign government influence in our markets and democracy are also embedded within our Constitution. As a recent article in the Atlantic notes, the treaty-ratification rule in the Constitution, which requires a two-thirds congressional vote, was included to reduce, what James Madison described as “the power of foreign nations to obstruct our retaliating measures on them by a corrupt influence.”
Apps like TikTok are the precise foreign threats which Hamilton and Madison cautioned us against. The app’s direct connection to the CCP is undeniable. To ensure alignment with Beijing’s policies, ByteDance has had an internal party committee as part of its governance structure since 2017. ByteDance’s Communist Party Secretary has even said the CCP will “take the lead” to ensure “all product lines and business lines” answer to the Party—including TikTok. Under penalty of perjury, a former head of engineering at ByteDance in the United States, Yintao “Roger” Yu, explained that this so-called “god credential” allows the CCP a backdoor to firewalls ByteDance uses to protect user data. Even the Biden administration acknowledges the CCP’s involvement. FBI Director Christopher Wray warned that TikTok “is a tool that is ultimately within the control of the Chinese government—and it…screams out with national security concerns.” President Biden’s Director of National Intelligence Avril Haines has said that China uses apps like TikTok to “develop[] frameworks for collecting foreign data and pulling it in…to target audiences for information campaigns.”
But the threat presented by TikTok is far from unique. Foreign governments have long tried to use the ways we communicate to engage in espionage campaigns subvert our democracy. Its why we require foreign media outlets to register as “foreign missions,” which mandates that they “share information on all their U.S.-based employees and properties with the U.S. government” or register as foreign agents.
Responses to these types of threats have been an important part of communications law for nearly a century. For instance, Congress passed the Federal Radio Act of 1927 that authorized the Federal Radio Commission (now the Federal Communications Commission) to block the threat posed by foreign adversaries that would use their communications companies to influence U.S. policy. The FRA added a 20% limit on foreign ownership interest in any radio station operating in the United States. This concern carried over to the Communications Act of 1934, specifically Section 310, which prohibits a foreign government or its representative from holding any radio license.
These foreign ownership restrictions apply to telecommunications services, too. Section 214 of the Communications Act allows the FCC to transfer or assign existing authorizations to operate within the United States. What’s more, the international portion of Section 214’s process ensures that the U.S. market is protected against potential anti-competitive behavior by a carrier with market power in a foreign country. The FCC has used this precise statute against Chinese companies with close ties to the Chinese government before, such as China Mobile, China Telecom, and Pacific Networks, when they attempted to enter our markets.
We even apply foreign ownership restrictions on telecommunications equipment. The FCC used Section 254 of the Communications Act to deny Huawei and ZTE monies from its Universal Service Fund on national security grounds. Similarly, Congress passed the Secure and Trusted Communications Networks Act of 2019, requiring the FCC to create a “covered” list of telecommunications equipment that pose a national security threat on the basis of the company’s ownership interest.
All of these actions have passed constitutional scrutiny.
The D.C. Circuit found that the FCC’s use of Section 214 against China Telecom and Pacific Networks was constitutional, even when considering that denying the licenses effectively banned China Telecom from our markets. The D.C. Circuit even upheld the FCC using national security as its legal basis. The Fifth Circuit, too, upheld the FCC’s decision to use Section 254 to ban Huawei and ZTE (two Chinese telecommunications companies) on the exact same legal grounds.
Worse for TikTok’s constitutional claim, the Act’s use of divestiture as a remedy is consistent with the U.S.’s general strategy to address national security concerns with respect to foreign ownership. It’s not the first time we have imposed that requirement on an app, as was the case for the LGBT-dating app Grindr. In that case, the Department of Treasury’s Committee on Foreign Investment in the United States—a U.S. federal interagency body authorized to perform national security reviews for certain foreign investments in the United States—required the Chinese owners, Beijing Kunlun Tech, to divest out of Grindr to address the noted national security threats associated with Kunlun’s relationship with the CCP. Grindr posed a national security threat because “the Chinese government’s potential to [use Grindr to] blackmail Americans, potentially including American officials, with data from the app.” These are the precise threats the government believes are the issue with TikTok, mind you.
Additionally, the Act’s requirement for the government to show that TikTok and ByteDance are not only owned by the foreign owner but also controlled by the adverse foreign government is consistent with a slew of other current foreign ownership requirements. The Act’s use of “direction or control” is a common legal phrase, used in a variety of statutes; all of which have been upheld by courts.
The Act simply fills in the necessary gaps in our current federal law, as the precise issue concerning TikTok may not fall within the specific scope of either the FCC or CFIUS’s remits. The FCC’s Section 214 authority only applies to “telecommunications services” that, at least for now, is limited to internet service providers, devices, and telecommunications, not mobile or web-based applications. CFIUS, too, is an unreliable authority to combat the national security issues at play with TikTok because its authority hinges on particular transactions occurring, even as its presiding statutes don’t provide much guidance as to what qualifies as a “covered transaction.” Even if CFIUS determined that a transaction qualifies, it has no authority to enforce compliance with its decisions; they are merely voluntary restrictions.
The Act addresses each of these issues: it applies to apps specifically, defines the specific transactions with which the government is concerned, and provides the government the tools to enforce compliance. This gives the D.C. Circuit a clear path to dismiss TikTok’s constitutional claims with prejudice.
The decision in this case will have vast implications on how the government can and ought to move forward with respect to thwarting national security threats using foreign ownership restrictions. Siding with TikTok and ByteDance means creating an extraordinary cybersecurity loophole, untethered from traditional notions and understandings of how foreign ownership restrictions operate. Such a ruling would create a roadmap for foreign enemies to use to pilfer sensitive consumer data from our people, serving as an invitation to known corporate affiliates of the Chinese, Russian, North Korean, and Iranian governments to weaponize our Constitution to spy on us.
Luckily, such an untenable result is not supported by our law, period.
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