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Federal judge blocks TikTok ban in Montana

Fri, Dec 1, 2023, 11:59 AM

A federal judge issued an injunction halting Montana's impending statewide TikTok ban, the first total ban of the social media platform in the US, saying the ban likely violates First Amendment rights. However, the judge did leave some room for a full ban to go into effect, saying the state legislature "used an axe to solve its professed concerns when it should have used a constitutional scalpel.”

Yahoo Finance's legal reporter Alexis Keenan explores the reasoning behind why the judge blocked the ban from taking effect.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

AKIKO FUJITA: A federal judge in Montana has blocked a statewide ban on TikTok from going into effect next year. The move puts a stop to the first attempt in the US for a full ban of the popular app at least temporarily. Alexis Keenan joins us now with more. Alexis, this is a temporary victory for the app. But how is this likely to move forward?

ALEXIS KEENAN: Yeah. So this federal judge in Montana, he made this decision on this request for injunction. And it favors TikTok users in Montana as well as TikTok, the company itself, over Montana's legislature. And the legislature, what it was going to do, was block both downloads and use of TikTok. That law was set to go in effect in the state-- into effect in the state in January.

So the law, though, it was passed in May-- and that was after the federal government as well as 25 or more state governments ban TikTok on government devices. And that was over national securities concerns. And the worry there is that TikTok's owner, ByteDance, could help purportedly spy on Americans because it is subject to a Chinese law and then ultimately the Chinese government.

Now Montana argued that this law protects consumers by super access. What they said is that China's government had this overall overreaching access into all user accounts on TikTok, whether those are Americans or users across the world. TikTok and the users for their part, they argued that the law, though, was unconstitutional. They said it violated their First Amendment protections to free speech as well as the Commerce Clause, as well as Foreign Affairs Clauses.

But it really highlights this decision, does the difficulty that governments have in facing these and addressing these concerns over user data being protected? Now the US Federal government, it has already been in negotiations with TikTok to try to find a solution for this purported problem. But the status of those negotiations is a bit unclear. In March-- you go back-- earlier in this year you had TikTok CEO testifying before Congress about these concerns.

Before that, you had an executive order by President Trump that failed. It demanded that TikTok take its US entity and divest it to a US company. You also have some legislation that's on the table that would give the Commerce Department the power to ban foreign technology that poses a national security threat. Now it's important, though, when you're looking at this decision to step back and see that the judge did leave some room.

And in his writing on this decision, he said, in the First Amendment analysis, it doesn't stop Montana or any other state, let's say, from trying to protect consumers. He said, because the legislature in writing this law, he said use an ax to solve its professed concerns when it should have used a constitutional scalpel. So what he's saying there is he wants this to be more fine tuned in order to even try to withstand this First Amendment scrutiny here. Akiko.

AKIKO FUJITA: So Alexis, does this mean that this specific case, at least this ruling doesn't necessarily set a precedent for all the other efforts to try and ban the app?

ALEXIS KEENAN: So yes and no, because this is an injunction to just stop the law from taking effect. What it still requires is an analysis by the judge to look at the violations that are being alleged and say, would the plaintiffs who are bringing this case, would they succeed on the merits? That means, would they succeed on the underlying case? And this judge's decision is, yes, that the plaintiffs would succeed.

So it does perhaps set a precedent in terms of analysis because if you have cases like this brought across the country, other judges could come to the same conclusion, they could come to a different conclusion. But it's also instructive for other plaintiffs who try to bring these cases, and defendants as well, legislatures, to try to craft the legislation differently so that potentially it could withstand this very difficult scrutiny that the First Amendment and some of these other constitutional challenges present.

AKIKO FUJITA: OK. Certainly not going to be the only effort here to try and get the app banned as we've seen a lot of push back. Alexis Keenan, thanks so much for that.

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Federal judge blocks TikTok ban in Montana

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