TikTok Faces Tough Questions from Court over Challenge to US Law

A view of the E. Barrett Prettyman US Court House in Washington, DC on September 16, 2024. (AFP)
A view of the E. Barrett Prettyman US Court House in Washington, DC on September 16, 2024. (AFP)
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TikTok Faces Tough Questions from Court over Challenge to US Law

A view of the E. Barrett Prettyman US Court House in Washington, DC on September 16, 2024. (AFP)
A view of the E. Barrett Prettyman US Court House in Washington, DC on September 16, 2024. (AFP)

A lawyer for TikTok and Chinese parent company ByteDance faced tough questions on Monday as a US appeals court heard arguments in their lawsuit seeking to block a law that could ban the short video app used by 170 million Americans as soon as Jan. 19.

A three-judge panel of the US Court of Appeals for the District of Columbia began hearing arguments in the suit filed by TikTok and ByteDance in May seeking an injunction barring the law from taking effect.

The judges questioned TikTok's outside lawyer Andrew Pincus, who argued that the US government had not demonstrated that TikTok poses national security risks and that the law violates the US Constitution on a number of grounds including running afoul of First Amendment free speech protections.

"The law before this court is unprecedented, and its effect would be staggering," Pincus told the judges, saying "for the first time in history, Congress has expressly targeted a specific US speaker, banning its speech and the speech of 170 million Americans."

The law gives ByteDance until Jan. 19 to sell or divest TikTok's US assets or face a ban in the United States. Driven by worries among American lawmakers that China could access data on Americans or spy on them with the app, the US Congress passed the measure with overwhelming support and President Joe Biden signed it into law in April.

The law prohibits app stores like Apple and Alphabet's Google from offering TikTok and bars internet hosting services from supporting TikTok unless ByteDance divests TikTok by the deadline. Under the law, Biden could extend the deadline by three months if he certifies ByteDance is making significant progress toward a sale.

Judges Sri Srinivasan, Neomi Rao and Douglas Ginsburg were hearing the arguments.

The case is playing out during the final weeks of the US presidential campaign. Republican presidential candidate Donald Trump and Vice President Kamala Harris, his Democratic rival, are active on TikTok, seeking to court younger voters.

The Justice Department has said TikTok, under Chinese ownership, poses a serious national security threat because of its access to vast amounts of personal data on Americans, asserting China can covertly manipulate information that Americans consume via TikTok.

ByteDance has said divestiture is "not possible technologically, commercially or legally."

TikTok and the Justice Department have asked for a ruling by Dec. 6, which could allow the US Supreme Court to consider any appeal before a ban takes effect.

The White House has said it wants to see Chinese-based ownership ended on national security grounds, but not a ban on TikTok. Trump, who unsuccessfully tried to ban TikTok in 2020, has said if elected in November he would not allow TikTok to be banned.



Apple Shares Slip as Shorter iPhone 16 Shipping Times Signal Soft Demand

The iPhone 16 Pro is seen at an event at the Steve Jobs Theater on its campus in Cupertino, California, US, September 9, 2024. (Reuters)
The iPhone 16 Pro is seen at an event at the Steve Jobs Theater on its campus in Cupertino, California, US, September 9, 2024. (Reuters)
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Apple Shares Slip as Shorter iPhone 16 Shipping Times Signal Soft Demand

The iPhone 16 Pro is seen at an event at the Steve Jobs Theater on its campus in Cupertino, California, US, September 9, 2024. (Reuters)
The iPhone 16 Pro is seen at an event at the Steve Jobs Theater on its campus in Cupertino, California, US, September 9, 2024. (Reuters)

Shares of Apple fell nearly 3% on Monday after some analysts said delivery times for the new iPhone 16 Pro models indicated weaker-than-expected demand, possibly due to the delayed rollout of key artificial intelligence features.

Apple last week unveiled its long-awaited iPhone 16 series designed around its AI software, Apple Intelligence.

Early pre-order data from BofA Global Research revealed shorter global shipping times for the iPhone 16 Pro models compared with last year's 15 Pro models, as of Monday, three days after Apple started taking pre-orders.

Ship time on average for the iPhone 16 Pro currently stood at 14 days, lower than 24 days for the iPhone 15 Pro last year, the data showed, while the 19-day ship time for the iPhone 16 Pro Max compares with 32 days last year.

"The key factor is the lower-than-expected demand for the iPhone 16 Pro series ... the major selling point, Apple Intelligence, is not available at launch," Ming-Chi Kuo, a Taiwan-based analyst at TF International Securities, said in a blog post.

Apple Intelligence is set to arrive in the US version of the English language in beta next month, and for other versions as late as next year, potentially keeping some customers on the fence about upgrading to the 16 series.

First-weekend pre-order sales for the iPhone 16 Pro and Pro Max models were down 27% and 16%, respectively, according to Kuo.

"The US is much weaker than last year, unless Apple massively increased supply allocation," Jefferies analysts said.

To be sure, some analysts also said that improving supply of the Pro models could have led to shorter shipping times this time around, after supply issues with a camera lens affected shipments for the iPhone 15 Pro Max last year.

"We are not concerned if pre-orders don't show meaningful growth," D.A. Davidson analyst Gil Luria said.

"The (AI) features will be rolling out gradually ... which means the upgrade cycle will likely materialize over the next 12-18 months."