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WASHINGTON (CN) — The Trump administration faces a federal lawsuit filed Thursday challenging its sale of social media giant TikTok to a group of White House-friendly companies led by software giant Oracle.
Two software engineers from California filed the suit in the D.C. Circuit, challenging the Jan. 22 deal as an undercut of the bipartisan Protecting Americans from Foreign Adversary Controlled Applications Act, which called for TikTok’s divestment from Chinese parent company ByteDance.
“This deal, like the many extensions that preceded it, facially violated the law,” the men say in their complaint. “Under the statute, ByteDance cannot have an ongoing ‘operational relationship’ with TikTok’s severed American operations. But in fact, under the announced deal, ByteDance would continue to own the app’s essential recommendation algorithm, and would license it to the new American TikTok entity.”
Further, the Chinese company would continue operating TikTok’s e-commerce, marketing and advertising operations, with CEO of global operations Shou Zi Chew taking a seat on the American version’s board.
The named petitioners in the case, Zhaocheng Tan and Garrett Reid, say they are shareholders in Alphabet Inc. — the parent company for Google — and Meta Platforms Inc., respectively.
They specifically sued Trump and Attorney General Pam Bondi, claiming Trump violated the law by extending the Jan. 19, 2025, divestment deadline four times, by directing Bondi not to investigate the law’s violation and by approving the deal.
“For the law to mean something, it must be followed, even — perhaps especially — by the president,” the plaintiffs say in the complaint. “Respondents have violated the statute and subverted the will of Congress. Petitioners bring this case to ensure that such violations, and such subversion, do not continue.”
Under the deal, TikTok agreed to offload its U.S. operations to Oracle — run by billionaire Trump ally Larry Ellison — MGX, Susquehanna International Group and General Atlantic.
The plaintiffs say each of the companies, either directly or through leadership, contributed millions to Trump’s political projects or invested billions in his personal businesses.
They warn the deal allows ByteDance to maintain control of “all the essential elements” of TikTok.
“Such a deal would subvert the very purpose of the TikTok Law, as ByteDance could continue to push Chinese propaganda and censor the content it does not like, exactly the harm that the law was intended to prevent,” the plaintiffs say.
The lawsuit sparks a second fight over the divestment law, after TikTok sued in the D.C. Circuit on May 7, 2024. In the suit, TikTok argued that Congress placed an unconstitutional condition on the company by requiring the divestment of its U.S. assets or be banned outright.
The ban, TikTok argued, was the first time Congress had enacted a law “that subjects a single, named speech platform to a permanent, nationwide ban, and bars every American from participating in a unique online community with more than 1 billion people worldwide.”
It asserted that divestiture was commercially, technologically and legally impossible and would effectively place American users on an island separate from the app’s global users.
A three-judge panel rejected the company’s First Amendment argument on Dec. 6, 2024, largely accepting the government’s national security assertions and suggested that the content on the platform could remain unchanged after divestiture and was only targeting the People’s Republic of China’s ability to “manipulate that content covertly.”
On Jan. 17, 2025, just two days before the ban was set to take effect, the Supreme Court upheld the ban in an unsigned emergency opinion.
The justices said Congress’ interest was based on foreign adversary control and content-neutral data collection — not speech. Emphasizing the narrowness of their ruling, the court said the TikTok ban should be treated as a special case.
Lawmakers had slipped the act into a sweeping foreign aid package — which unlocked around $95 billion in aid for Ukraine, Israel and Taiwan — which was signed into law by former President Joe Biden on April 24.
The statute was based, in part, on determinations by Trump in 2019, Biden in 2021 and by Congress that China is foreign adversary. Trump began reversing his position on TikTok during the 2024 presidential campaign in part to counter Facebook, and stated after his election that he had a “warm spot” in his heart for the app after Gen Z voters shifted to the right.
While most of the legal arguments in court and on Capitol Hill centered on Chinese propaganda, several lawmakers — such as former Republican Representative Mike Gallagher, former Senator Mitt Romney and former Secretary of State Anthony Blinken — explicitly cited users’ pro-Palestinian positions on the app.
The White House did not respond to a request for comment.
Tan and Reid are represented by Brendan Ballou with the Public Integrity Project.
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