TikTok Files Challenge against Canadian Government Order to Dissolve its Business in the Country

The TikTok app logo is seen in this illustration taken, August 22, 2022. (Reuters)
The TikTok app logo is seen in this illustration taken, August 22, 2022. (Reuters)
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TikTok Files Challenge against Canadian Government Order to Dissolve its Business in the Country

The TikTok app logo is seen in this illustration taken, August 22, 2022. (Reuters)
The TikTok app logo is seen in this illustration taken, August 22, 2022. (Reuters)

TikTok has challenged a Canadian government order to shut down the Chinese video-sharing app's business operations in the country that was imposed over national security concerns.

The company said Tuesday that it filed an application for a judicial review with the Federal Court in Vancouver on Dec. 5, which seeks to set aside the order for TikTok to wind-up and cease its business in Canada.

The Canadian federal government last month announced it was ordering the dissolution of TikTok Technology Canada Inc. after a national security review of its Chinese parent company ByteDance Ltd, The AP reported.

The government is not blocking access to the TikTok app, which will continue to be available to Canadians. TikTok said it has 14 million users in Canada, which is about a third of the population. It has offices in Toronto and Vancouver.

The wildly popular platform is owned by ByteDance, a Chinese company that moved its headquarters to Singapore in 2020, but is under increasing pressure in the West. It's facing a possible ban in the US and intensifying scrutiny in Europe over issues including election influence campaigns allegedly coordinated by Moscow.

TikTok argues in its court application, which was posted online, that Industry Minister François-Philippe Champagne's decision was “unreasonable” and “driven by improper purposes.” It says the order is “grossly disproportionate” and the the national security review was “procedurally unfair.”

The review was carried out through the Investment Canada Act, which allows the government to investigate foreign investment with potential to harm national security.

Champagne said in a statement at the time that the government was taking action to address “specific national security risks,” but did not elaborate. His office said in response to the filling that the government’s decision was informed by a “thorough national security review and advice from Canada’s security and intelligence community.”

TikTok said Champagne “failed to engage with TikTok Canada on the purported substance of the concerns" that led to the order.

It argues the government ordered “measures that bear no rational connection to the national security risks it identifies" and that the reasons for the order “are unintelligible, fail to reveal a rational chain of analysis and are rife with logical fallacies.”

The platform says there were “less onerous” options than shutting down its Canadian business, which it said would eliminate hundreds of jobs, threaten business contracts and “cause the destruction of significant economic opportunities."



Google Offers to Loosen Search Deals in US Antitrust Case Remedy

The Google sign is shown on one of the company's office buildings in Irvine, California, US, October 20, 2020. REUTERS/Mike Blake
The Google sign is shown on one of the company's office buildings in Irvine, California, US, October 20, 2020. REUTERS/Mike Blake
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Google Offers to Loosen Search Deals in US Antitrust Case Remedy

The Google sign is shown on one of the company's office buildings in Irvine, California, US, October 20, 2020. REUTERS/Mike Blake
The Google sign is shown on one of the company's office buildings in Irvine, California, US, October 20, 2020. REUTERS/Mike Blake

Alphabet's Google proposed on Friday a loosening of its agreements with Apple and others to set Google as the default search engine on new devices, in a bid to address a US ruling that it unlawfully dominates online search.

The proposal is muchu narrower than the government's push to make Google sell its Chrome browser, which Google called a drastic attempt to intervene in the search market.

Google urged US District Judge Amit Mehta in Washington to move cautiously in deciding what the company must do to restore competition, after his ruling that the company holds an illegal monopoly in online search and related advertising. Courts have cautioned against imposing antitrust remedies that chill innovation, Google said in court papers.

That is especially true "in an environment where remarkable artificial intelligence innovations are rapidly changing how people interact with many online products and services, including search engines," Google said.

While Google plans to appeal that ruling at the end of the case, it says the upcoming "remedies" phase should focus on its distribution agreements with browser developers, mobile device manufacturers, and wireless carriers.

The judge found the agreements give Google a "major, largely unseen advantage over its rivals" and result in most devices in the US coming pre-loaded with Google's search engine.

The agreements are hard to exit, the judge said, especially for Android manufacturers, which must agree to install Google search in order to include Google's Play Store on their devices.

To fix that, Google could make them non-exclusive and, for Android phone manufacturers, unbundle its Play Store from Chrome and search, the company said in its proposal.

Google would allow browser developers that agree to set its search engine as the default to revisit that decision annually under the proposal.

REVENUE SHARING

Unlike the government's proposal, Google's would not end revenue sharing agreements, which pass a portion of ad revenue Google makes from search to the device and software companies that present it as the default search engine.

Independent browser developers including Mozilla, which makes Firefox, have said the funds are crucial to their operations. Apple received an estimated $20 billion from its agreement with Google in 2022 alone.

Kamyl Bazbaz, spokesperson for search engine competitor DuckDuckGo, said the proposal attempts to maintain the status quo.

"Once a court finds a violation of competition laws, the remedy must not only stop the illegal conduct and prevent its recurrence, but restore competition in the affected markets," he said.

Google's proposal sets the stage for a trial Mehta will hold in April, where the US Department of Justice and a coalition of states will seek to show the need for wide-ranging remedies, including making Google sell off Chrome and potentially its Android mobile operating system.

The government plans to call witnesses from OpenAI, AI search startup Perplexity, and Microsoft, according to court papers.

Prosecutors also want Google to stop paying to be the default search engine, and cease investments in search rivals and query-based AI products, and license its search results and technology to rivals.

The proposals aim to spur innovation in online search, where Mehta found Google's overwhelming market share keeps competitors from gathering the search data needed to improve their products, and prevent Google from extending its dominance in search to AI.