Two tech investors, backed by a former Justice Department prosecutor, have filed a civil lawsuit against the Trump administration for allegedly failing to enforce a law that required TikTok to divest from its China-based owner. The lawsuit, filed in the Washington, D.C., Circuit Court of Appeals, argues that multiple extensions granted by President Trump were unlawful and that the approved deal violated the legislation.
Key Takeaways
Two tech investors have filed a civil lawsuit against the Trump administration for allegedly failing to enforce a law requiring TikTok to divest from its China-based owner. The plaintiffs argue that multiple extensions granted by President Trump were unlawful and that the approved deal violated the legislation.
- Tech investors sue Trump administration over TikTok sale
- Plaintiffs claim multiple extensions and final deal violated the law
- Investors allege financial harm due to the government's actions
- Deal allowed ByteDance to retain control of TikTok's recommendation algorithm
- Plaintiffs seek court declaration that administration's actions were unlawful
The plaintiffs, Zhaocheng Anthony Tan and Garrett Reid, are investors in Google parent company Alphabet Inc. and Facebook parent Meta Platforms, respectively. They claim to have suffered financial harm due to the government's actions. The lawsuit argues that a deal cut earlier this year for new investors to take over TikTok's U.S. operations did not comply with the law.
The law, unanimously upheld by the Supreme Court, made it unlawful for app stores to offer updates or new downloads after the Jan. 19, 2025 deadline for China-based ByteDance to divest from TikTok. However, President Trump issued a series of executive orders granting extensions and directing the Justice Department not to penalize tech companies hosting TikTok.
The lawsuit argues that the deal approved by Trump allowed ByteDance to retain control of TikTok's recommendation algorithm, violating the law's requirement for no 'operational relationship' with ByteDance. The plaintiffs also allege that some investors in the new deal have close ties to President Trump and have personally enriched him.
The Department of Justice declined to comment on the lawsuit. Oracle, one of the investors in the new TikTok entity, also declined to comment. The case is being handled by Brendan Ballou, a former Justice Department prosecutor who now serves at The Public Integrity Project.
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