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Lawsuit Challenges US Approval of TikTok Joint Venture Deal

By  |  March 5, 2026
Lawsuit Challenges US Approval of TikTok Joint Venture Deal

President Donald Trump and Attorney General Pam Bondi were sued on Thursday over the U.S. government’s approval of a restructuring deal involving TikTok’s Chinese parent company, ByteDance. The lawsuit argues that the administration’s approval of the arrangement violated a 2024 law intended to force the sale of the company’s U.S. assets,  according to Reuters.

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    The case was filed in the U.S. Court of Appeals for the District of Columbia by the Public Integrity Project on behalf of two U.S. retail investors who hold shares in competing social media companies, per Reuters. The plaintiffs are seeking to require a renegotiation of the agreement, saying the current structure could allow administration allies to influence or censor political content on one of the world’s largest social media platforms. The suit does not call for TikTok to be banned in the United States, where about 200 million people use the app.

    The legal challenge centers on legislation passed by Congress in April 2024 that required ByteDance to sell TikTok’s U.S. operations by January 2025 or face a nationwide ban or potentially massive financial penalties. However, the lawsuit says Trump chose not to enforce those provisions and that Bondi told companies they would not be held liable for continuing to support TikTok’s operations in the country, according to Reuters.

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    ByteDance previously announced that TikTok’s U.S. operations would be transferred into a new entity called TikTok USDS Joint Venture LLC. The company said the venture, finalized in January and 80% owned by non-Chinese investors, would safeguard American user data, applications and algorithms through new cybersecurity and privacy measures. Few details were disclosed about the financial structure of the deal or the specifics of the divestiture, per Reuters.

    The lawsuit argues that the arrangement fails to meaningfully separate ByteDance from the platform’s core operations. “Under the announced deal, ByteDance would still control 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,” the filing said.

    The agreement marked a significant moment for TikTok, which has faced years of scrutiny and regulatory battles in the United States. The dispute dates back to August 2020, when Trump first attempted to ban the app over national security concerns tied to its Chinese ownership, according to Reuters.

    This lawsuit represents the first formal legal challenge to the joint venture deal and could bring additional scrutiny to the structure that allowed TikTok to continue operating in the United States. Some lawmakers have already criticized the arrangement, arguing it may not fully address concerns about foreign influence over the platform, per Reuters.

    The White House, the Justice Department and TikTok did not immediately respond to requests for comment, according to Reuters.

    Source: Reuters