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- [00:00]
A
Foreign. Welcome back to another episode of Sharp China. I'm Andrew Sharp. And on the other line, back for an emergency pod, Bill Bishop. Bill Tick Tock is headed to the highest court in the land. Do you have your popcorn ready here?
- [00:22]
B
I wish it were something stronger, but. But yes, there you go.
- [00:27]
A
Well, we joked about it on the episode that we recorded 24 hours ago. We joked about the idea of a TikTok emergency episode. I don't know if this constitutes a full emergency episode, but an interesting follow up because in an unsigned order from the Supreme Court on Wednesday morning, they wrote the parties are directed to brief and argue the following question whether the Protecting Americans from Foreign Adversary Controlled Applications act as applied to petitioners, violates the First Amendment. So the Supreme Court has officially granted cert to TikTok and ByteDance and will hear the appeal. Briefs are due December 27th before 5pm Replies are due Friday, January 3rd. Oral arguments will be heard on Friday, January 10th. An extremely expedited schedule. Any thoughts on where we stand here?
- [01:25]
B
So this is Good news for TikTok. You know, they're getting their days in, multiple days in court. And this is again gives them hope that they can actually prevail.
- [01:35]
A
Yeah.
- [01:36]
B
And I mean one question is if they have the arguments on the 10th, should we assume the supreme the justices will like, how long, how many days will it take for a turnaround for the justices to rule?
- [01:46]
A
You know, I'm not going to guess. On the last show I said I'd be surprised if the court hears the case at all. Clearly my instincts thinks were wrong. I should have known better than to try to make predictions about what the Supreme Court would or wouldn't do on a tight timeline like this. But I think it's clear they're giving the Biden DOJ an opportunity to weigh in before the Trump DOJ takes over because it's an expedited schedule. And so I think there's recognition from the court that this needs to get done before January 19th. And, and honestly thinking about it this afternoon, I'm actually really glad that this will be decided by the Supreme Court because it will leave no room for doubt about the process and the constitutional validity of the law. And the act of banning TikTok is a really big deal. It reflects recognition that the CCP is a hostile foreign adversary and it's something that the American public will feel in a much more visceral way than say, export control policies on chips and whatnot. I mean, I'm glad the Supreme Court will have the final word on what's happening here because I think if anything, it's been underplayed, what a big deal it is. But in a couple of weeks, it's the sort of thing that everybody's going to be talking about.
- [03:06]
B
So, so they're not. So they're hearing these arguments. They're not issuing a delay. So at this point they're not saying we're going to wait till after January 19th. Right. So. So we should assume then that we'll get an answer from the supreme court before the 19th. Is that correct?
- [03:22]
A
Right. I think that's correct. Although they've deferred judgment on TikTok's motion for a temporary injunction, the motion for an emergency temporary injunction, until after oral arguments. So they could conceivably hear oral arguments on January 10 and then grant an emergency temporary injunction while they decide the merits of the substantive appeal. But they have rejected all of TikTok's arguments in the D.C. circuit outside of the First Amendment question. And on the First Amendment question, the other thing I alluded to on Tuesday's show was the complex constitutional questions. It's really a tangled web here. From what I understand as an amateur, there are unresolved Questions about whether TikTok US has First Amendment rights as a subsidiary of ByteDance, what level of constitutional scrutiny should be applied analyzing the law. And because the Supreme Court has already ruled that algorithms are expressive conduct in the Net Choice case earlier this year, if the government is trying to force a divestiture, in part because of concerns over TikTok's algorithmic output, does that constitute the sort of content based regulation of speech that's precluded by the First Amendment? On that front, I don't know where the Supreme Court will land, but I was reading. I reread the D.C. circuit opinion on Wednesday afternoon. So just to set the table for anybody who's curious, this was the D.C. circuit on the First Amendment question. The government's concern with content manipulation does not reflect an impermissible purpose or justification. On the contrary, the government's aim is to preclude a foreign adversary from manipulating public dialogue. To that end, the act narrowly addresses foreign adversary control of an important medium of communication in the United States. Consequently, the government does not suppress content or require a certain mix of content. Indeed, content on the platform could in principle remain unchanged after divestiture, and people in the United States would remain free to read and share as much PRC propaganda or any other content as they desire on TikTok or any other platform of their choosing. What the act what the act targets is the PRC's ability to manipulate that content covertly. Understood in that way, the government's justification is wholly consonant with the First Amendment. And then later in the holding, they say TikTok emphasizes stray comments from the Congressional proceedings that suggest some congresspersons were motivated by hostility to certain content. The Supreme Court, however, has repeatedly instructed that courts should not strike down an otherwise constitutional statute on the basis of an alleged illicit legislative motive. The act itself is the best evidence of the Congress's and the President's aim. The narrow focus of the act on ownership by a foreign adversary and the divestiture exemption provide convincing evidence that ending foreign adversary control, not content censorship, was the government's objective. Notably, TikTok never squarely denies that it has ever manipulated content on the TikTok platform at the direction of the PRC. Its silence on this point is striking given that the intelligence community's concern is. Is grounded in the actions ByteDance and TikTok have already taken overseas. So there you go. The D.C. circuit was pretty clear.
- [07:04]
B
No, I was going to say is extremely clear. Why would. Why would TikTok be silent on that issue of whether or not it's ever manipulated content on behalf of the prc?
- [07:12]
A
Well, it's a good question, something for the audience to ponder.
- [07:17]
B
So. So how do you. So, I mean, not that. Not that we'll know because it's not televised, but it would be so interesting if one of the Supreme Court justices in the oral arguments asked that question directly.
- [07:28]
A
I hope they do. I hope they do. Right.
- [07:30]
B
I mean, how do you. If you're Noel Francisco, the former Solicitor General for Trump who's now on the TikTok legal team payroll, how would you answer that question?
- [07:40]
A
You'd answer that question very, very carefully. I'm sure they'll come rehearsed with some sort of answer on January 10, but it is telling that there has not been a direct denial to date.
- [07:53]
B
Well, certainly not when they're under o.
- [07:56]
A
That's exactly right. Let's.
- [07:57]
B
Let's be clear.
- [07:58]
A
Yeah. So, like I said, get your popcorn ready. I do think it's good that the First Amendment concerns are being addressed head on here, and the concerns with the algorithm should be centered in the discussion, because I feel like some members of Congress tried to sort of downplay the algorithmic concerns, in part because it was a more complicated legal fight, and it was all about data, data, data. But I would say that PRC, the PRC's ability to influence the algorithmic output of TikTok in the United States was Always the best reason to move forward with some sort of forced divestiture or a ban. And the Supreme Court will answer those questions conclusively, presumably before Donald Trump takes over on January 20th.
- [08:51]
B
But we'll have to wait because, Because. But there is a chance they could also agree to issue an injunction while they continue to deliberate, right?
- [08:57]
A
I believe that's possible at this point, yes.
- [09:00]
B
And so then it would then ultimately, again, it would continue to give TikTok the potential hope that somehow something could be fixed in the Trump administration.
- [09:09]
A
TikTok does have hope. There's no question about it. I mean, and with Trump, I mentioned it on the last show, I said he was potentially making a show of good faith to save TikTok and then may not ultimately save TikTok. I'm not going to try to predict what he will or won't do. But one thing that has occurred to me recently is that when you look back at the last 10 years of Trump in politics, there have been a lot of people who have partnered with Trump thinking that they could control him or change him, only to turn around and find out that Trump was actually changing them or controlling them. And people can say what they want about Trump, but he's not an idiot.
- [09:55]
B
So. Clearly not.
- [09:57]
A
It's possible that if this law stands and is upheld by the Supreme Court, he will turn around and say to Jeff Yass, thank you for all the donations, but the Supreme Court has spoken here. My hands are tied.
- [10:09]
B
Well, and I was going to actually say something similar. And it's also, you know, we tried.
- [10:13]
A
Yeah, yeah. And, you know, again, not making that prediction, but I think that's an equally likely outcome to Trump taking over on January 20th and saying, no, we're not going to enforce this law or I'm going to improve. I'm going to approve some sort of fig leaf divestiture.
- [10:32]
B
I mean, if you look at, if you look at the, the number of people in the Republican Party who were really among the leading forces to get this law passed, and some of them are going into the Trump administration. You know, none of them want to say anything against the President elect, but it is, it is really, I think, causing quite a meltdown in parts of the Republican Party.
- [10:55]
A
Is it really, in terms of people who are taking over? Because it would make sense. I mean, like Brendan Carr, the pick to head the sec. Very, very vocal.
- [11:05]
B
It puts them in a very difficult position if they're serving in the administration. And Trump undoes it somehow and does it in a way that is, you know, again, would be somewhat sham like most likely, as opposed to something more on the optics as opposed to the actual substance of solving the problems that the law has been trying to address. And so, but again, you know, TikTok is getting its day in court. I mean, I think one of the things also interesting when you look at this whole issue in the context of the Republican Party and the Trump administration is President Trump's flip flopping over TikTok has really been quite something to behold. And you have people like incoming Commerce Secretary or nominee for Commerce Secretary Howard Lutnick, some of the other stat picks like you mentioned, Bread and Carr, they talk about reciprocity as the governing principle for trade relations and especially with China. But then you have President elect Trump talking about maybe we, you know, saving TikTok when there's, you know, Meta, Google, YouTube, Instagram, Snapchat, etc. None of them are allowed in China. You know, and when China protects its security through censorship, approval requirements, ownership requirements, etc. It's really quite, it's a quite glaring sort of spotlight on the hypocrisy here.
- [12:25]
A
Yeah, no, exactly. And my question is, is this a lot of sound and fury signifying nothing at the end of the day from Trump? And substantively, will TikTok be banned by January 20th? Maybe. And because it would make sense for Trump to basically play nice and say the right things to appease the Kellyanne Conway's of the world and Jeff Yass. But politically it would be really difficult to try to pull off something so brazenly hypocritical and adverse to the long term interests of the United States. But I'm not ruling that out either.
- [13:08]
B
I mean it's D.C. and so how do you lobby Supreme Court justices?
- [13:12]
A
Well, that's the other thing.
- [13:13]
B
I mean this is a, this is a, you know, this, that we're talking about tens and tens of billions of dollars in value for ByteDance and its investors in TikTok and in ByteDance and, and so you're, they're basically, they name, name your price moment when they're trying to get lobbying for this. So.
- [13:29]
A
No, exactly. And you mentioned on the last show the idea of maybe Trump was signaling to the Supreme Court when he gave that press conference at Mar? A Lago on Monday. Who knows whether that's true? Who knows whether the court would be receptive to that sort of signaling. I think either way, it's a good thing that the court has taken up this case and will hear oral arguments and render a final judgment on a lot of These contested issues.
- [13:57]
B
No, I agree. And if it, if it turns out, no matter how the decision goes, it's a good thing. If it turns out that the court basically upholds the, upholds the law, you know, doesn't, doesn't overturn the decision of the, of the D.C. court. You know, again, TikTok had went through the, the legislative branch, they went through the executive branch, they went through the judicial branch. They had their days in court.
- [14:21]
A
They've had every opportunity.
- [14:22]
B
Every opportunity. And so in some ways, again, I go back to if this, you know, how many American companies that have been gotten in trouble in China have had their day in court?
- [14:31]
A
Not many. And that, and that's one of the reasons, like the integrity of the process here is important, because as much as TikTok and this whole issue can seem like a bit of a sideshow and we usually talk about it at the end of the episodes when we're getting a little loopy. It is a really important decision both for the US China relationship and also just the US System generally. We don't typically take steps like this, and we shouldn't take steps like this lightly. So I'm glad that there won't be any room to nitpick the way this act has moved forward at the end of this process.
- [15:14]
B
So we, we possibly think we don't know how they'll roll. I mean, again, they could kick it in the Trump administration and then we'll have, we could. It's like, it's like the topic that never ends right, the gift that keeps giving.
- [15:25]
A
Well, yeah, but there's not going to be any argument that this was just sort of covertly pushed through, not never got a fair hearing. Whatever the hell happens after January 20th is its own open question. So we'll keep our popcorn ready.
- [15:40]
B
No, you, you absolutely, you, you absolutely can't say that they didn't have, they have not had a fair, a fair chance here, a fair hearing. Totally agree. So the lawyers, but it's good news for the lawyers. They're going to make probably a couple new vacation homes between now and the Orlon.
- [15:58]
A
It's good news for the partners. It's great news for the partners. It's really terrible news for the poor four associates at Jones Day who just had their holidays completely nuked by this briefing schedule. So my heart goes out to them. I hope they're taken care of when it's bonus time. And congrats to Noel Francisco and anybody else who's going to be arguing on January 10th. But I just wanted to follow up, because I do think it's an important issue. And we will continue to chronicle it into 2025. But, Bill, unless you have any final thoughts, I think now we can officially go on hiatus here and return in January. Wish everyone a happy holiday and we'll keep it rolling in the new year.
- [16:44]
B
Yes. Thank you. Thanks, everyone. Happy holidays.
- [16:46]
A
Happy holiday.