TikTok is preparing to mount a legal challenge as early as Monday to President Donald Trump's executive order prohibiting transactions with the popular short video app and its Chinese parent ByteDance, according to people familiar with the matter.
Mr Trump issued an executive order on Aug 14 that gave ByteDance 90 days to divest the US operations of TikTok. ByteDance has been making progress in talks with potential acquirers, including Microsoft Corp and Oracle. Some of ByteDance's US investors could also join the winning bid. TikTok's legal challenge pertains to an earlier executive order, which Mr Trump issued on Aug 6, the sources said. That order directed the Secretary of Commerce to come up with a list of transactions involving ByteDance and its holdings that should be banned after 45 days.
TikTok plans to argue that the Aug 6 executive order's reliance on the International Emergency Economic Powers Act deprives it of due process, according to the sources. TikTok will also contest its classification by the White House as a national security threat, the sources added. It was not immediately clear which court TikTok plans to use to file its lawsuit. The company had previously said it was exploring its legal options, and its employees were also preparing their own lawsuit.
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