A federal judge has blocked a Montana law banning the popular video sharing app TikTok, finding “little doubt” that it was “more interested in targeting China’s extensible role in TikTok than with protecting Montana consumers.” The ruling, likely to be celebrated by consumers and free speech advocates alike, comes at a time when federal and state governments are grappling with how to regulate social media companies.
The TikTok app is run by a multinational team, situated mainly in Singapore and the U.S., with users in more than 170 countries, including approximately 150,000,000 in the U.S. and 380,000 in Montana. While TikTok’s parent company, ByteDance Ltd., is a Chinese entity, the app is not available in China.
At issue in the case is Senate Bill 419, which the Montana governor signed into law in June 2023. SB 419 bans TikTok from operating within the territorial jurisdiction of Montana, imposing a $10,000 penalty per day on either TikTok or any mobile app store for “each time [a] user accesses TikTok.” Among other things, the preamble to SB 419 claims the law is necessary to prevent “the Chinese Communist Party” from “conduct[ing] corporate and international espionage in Montana.”
The case is a consolidated action brought by individual plaintiffs and TikTok itself. One of the plaintiffs, Samantha Alario, runs a sustainable swimwear business in Montana and uses TikTok to market her goods. Apparently, unlike other platforms, Alario could market her business on TikTok without paying for ads. She also accumulated 10 times as many followers on TikTok than on Facebook. Another plaintiff, Carly Ann Goddard, had 101,000 followers on TikTok for her ranching lifestyle business, compared to just 157 followers on YouTube. The recent ruling is in response to the plaintiffs’ motion for a preliminary injunction barring the Attorney General from enforcing SB 419 while the case moves forward.
At the heart of the dispute is a question about how much control the Chinese government has over TikTok and the access it has to TikTok user data. Citing news coverage, Montana claimed that the Chinese government had a “superuser” credential, giving it unrestricted access the personal data of any TikTok user. While denying such claims, TikTok also pointed out that it had implemented safeguards to protect U.S. user data and prevent foreign access to its systems. It also contracted with a major U.S. company to provide cloud storage for all U.S. user data.
Ultimately, the court agreed to enjoin SB 419 on several grounds. First, it found that the law violated the First Amendment of the U.S. Constitution. The state argued that it was permissible in order to protect consumers, particularly minors, within the state. Yet, these arguments fell flat. Montana has no constitutional authority in the field of foreign affairs. The court also expressed concern with the “pervasive undertone of anti-Chinese sentiment that permeates the state’s case and the instant legislation.”
Second, the court found that SB 419 was preempted by federal law as an impermissible attempt at regulating foreign affairs. Citing Supreme Court precedent, it found that the Supremacy Clause of the U.S. Constitution “entrust[ed] foreign policy exclusively to the National Government.” (See Am. Ins. Ass’n v. Garamendi, 539 U.S. 396, 419 n.11, 421 (2003).) While the state claimed the law was about protecting consumers in Montana, the court found that it “cannot be fairly characterized as a garden-variety [consumer protection] regulation,” given the explicit references to the Chinese government and “foreign adversar[ies].” Further, the court found that SB 419 was likely also preempted by the Defense Production Act and the Economic Powers Act.
Lastly, the court found that SB 419 violated the Commerce Clause of the U.S. Constitution. The law would impose a burden on interstate commerce with no discernible local benefits in Montana. It was facially discriminatory, given the language about “foreign adversar[ies]” and “hostile foreign government[s].”
Based on these findings, the court determined it was likely that allowing SB 419 to go into effect would cause the plaintiffs irreparable harm. Therefore, it entered a preliminary injunction to ban the Attorney General from enforcing SB 419 while the case moves forward.
The case is a victory for TikTok and the individual plaintiffs, but will also be celebrated by free speech advocates, as multiple organizations filed amicus briefs in support of the injunction. It comes at a time when legislatures and the judiciary are weighing how to regulate social media companies.
In October, the Supreme Court granted a request from the U.S. Department of Justice to block a lower court order limiting the government’s ability to communicate with social media companies about content moderation. (See Murthy v. Missouri, ___ S. Ct. ___, 2023 WL 6935337 (Oct. 20, 2023).) The Supreme Court will also hear oral arguments this term in two cases involving social media: one considering the social media activity of public officials and another concerning laws in Florida and Texas that regulate how social media companies control content posted by their users. The U.S. House of Representatives also recently held hearings on TikTok’s operations over concerns about digital privacy.
This ruling against Montana’s legislation is a crucial development in the ongoing legal battles surrounding social media, digital privacy, and state versus federal powers. As the Supreme Court prepares to weigh in on related cases, the legal community and digital platforms alike await with keen interest to see how these evolving issues will shape the future of online communication and governance.