Lawsuit Aims to Reverse TikTok Sale

A law firm whose leaders include former Sen. Russ Feingold filed a lawsuit Thursday (March 5) against President Donald Trump and Attorney General Pam Bondi Thursday (March 5), aiming to rescind the government’s approval of the sale of TikTok’s U.S. operations.

The law firm, Public Integrity Project LLC, filed the lawsuit on behalf of two investors who hold shares in Meta and Alphabet, alleging that the sale of TikTok harmed investors in these companies that compete with TikTok, according to the complaint.

The complaint alleges that the deal violated the “TikTok Law” that required TikTok to be sold or banned in the U.S. It did so by allowing TikTok to have an ongoing “operational relationship” with its former owner, Chinese company ByteDance, which still owns the app’s recommendation algorithm and licenses it to the new American TikTok entity, according to the complaint.

“When the illegal sale was announced, Petitioners suffered financially,” the complaint said. “By sanctioning an unlawful deal, the government has created a legal impediment to Petitioners’ financial recovery. Petitioners therefore seek to have the government follow the law, rescind its endorsement of an illegal deal, and investigate violations of law as required by statute.”

Reached by PYMNTS, the Justice Department declined to comment on the lawsuit.

The law banning TikTok unless it was sold was signed by then-President Joe Biden in April 2024.

The law gave ByteDance 12 months to sell its stake in the company or risk the platform being shut down.

Supporters of the law argued that the threat of a ban was necessary for national security concerns.

Sen. Maria Cantwell said shortly before the bill was signed into law: “Congress is acting to prevent foreign adversaries from conducting espionage, surveillance, maligned operations, harming vulnerable Americans, our servicemen and women, and our U.S. government personnel.”

It was announced in January that TikTok would continue to operate in the U.S. as a new, majority American-owned joint venture with three managing investors: Silver Lake, Oracle and MGX, each of which holds 15%. ByteDance retains 19.9% of the joint venture.

The joint venture said in a Jan. 22 press release that it is designed to protect U.S. national security.