TikTok Sale Lawsuit Accuses Trump of Ignoring Anti-China Rules

A new lawsuit filed by the Public Integrity Project accuses former President Trump and his former attorney general, Pam Bondi, of deliberately circumventing federal law during the process of approving the sale of TikTok’s U.S. Assets to a consortium of investors with ties to the Trump administration. The suit alleges that the administration prioritized political connections over national security concerns and legal requirements established by Congress regarding the potential risks posed by foreign-owned social media platforms.

The legal challenge centers on a 2024 law that mandated ByteDance, TikTok’s Chinese parent company, to divest its U.S. Operations or face a ban. While the law aimed to address concerns about data security and potential Chinese government influence, the Trump administration ultimately brokered a deal that allowed a group of American investors – including Oracle, Susquehanna International Group, Silver Lake, Emirati investment firm MGX, and others – to acquire a stake in TikTok without fully divesting ByteDance’s control, particularly over the app’s crucial recommendation algorithm. CNN reported the transaction formally closed in January 2026, just before a deadline set by Trump.

The Core of the Legal Argument

The Public Integrity Project argues that the Trump administration’s actions directly contradicted the intent of the 2024 law, which was designed to prevent the spread of potential Chinese propaganda and protect American user data. The lawsuit claims that Trump repeatedly extended the deadline for ByteDance to divest, and ultimately approved a deal that fell short of full divestiture, effectively ignoring the legislation. Brendan Ballou, chief executive of the Public Integrity Project, stated the administration’s actions sent a message that the president was “quite literally beyond the reach of the courts, beyond the reach of Congress, beyond the reach of the rule of law.”

The plaintiffs in the case, software engineers Zhaocheng Anthony Tan and Garrett Reid, are shareholders in companies that compete with TikTok – Alphabet (Google’s parent company) and Meta (Facebook’s parent company) – and claim they were harmed by the administration’s failure to enforce the law. They allege that a fully enforced divestiture would have benefited their companies.

A History of Scrutiny and Congressional Action

The concerns surrounding TikTok’s ownership and data security have been escalating for years. In the spring of 2024, Congress passed legislation requiring ByteDance to sell TikTok or face a nationwide ban. This bipartisan effort reflected growing anxieties about the potential for the Chinese government to access user data or manipulate the platform’s content. TikTok challenged the law, arguing it violated the First Amendment rights of its users, but the Supreme Court ultimately unanimously upheld the law in January 2025.

Prior to the Supreme Court ruling, the Trump administration had been actively involved in negotiations with ByteDance to locate a resolution. A previous agreement, similar to the one finalized in January 2026, was explored in 2025 but faced numerous hurdles. Reuters reported in September 2025 that the new agreement mirrored the terms of that earlier, stalled deal.

Project Texas and Data Security Measures

The current arrangement, while not a complete divestiture, aims to address some of the initial security concerns through a framework known as “Project Texas.” According to Harvard Law School lecturer Timothy Edgar, Project Texas was a voluntary effort by TikTok to implement safeguards in response to scrutiny from the Committee on Foreign Investment in the United States (CFIUS). Harvard Law Today explains that CFIUS, established under the Defense Production Act, played a key role in pushing TikTok to enhance its security measures.

These safeguards include comprehensive data protection protocols, algorithm security measures, content moderation policies, and software assurances designed to protect U.S. User data. The joint venture operating TikTok in the U.S. Is led by CEO Adam Presser and Chief Security Officer Will Farrell, and overseen by a board including representatives from Oracle, Susquehanna, MGX, and Shou Chew, TikTok US CEO. Trump himself publicly thanked Chinese President Xi Jinping for approving the deal, a statement that has raised further questions about the motivations behind the agreement.

Ongoing Concerns and the Algorithm Question

Despite these measures, critics argue that the deal does not fully resolve the national security risks. A central concern remains ByteDance’s continued ownership of TikTok’s recommendation algorithm, which determines the content users notice. The lawsuit contends that this control allows ByteDance to potentially influence the information presented to American users and gather valuable data. Edgar suggests that the new structure may have even worsened the problem, exposing users to additional privacy risks.

The algorithm’s influence is significant. It’s the engine that drives engagement on TikTok, and control over it allows for the potential manipulation of trends, the amplification of specific narratives, and the collection of detailed user data. While the joint venture is responsible for content moderation and data security, the underlying algorithm remains under the control of a Chinese company.

What Comes Next: Legal Challenges and DOJ Scrutiny

The Public Integrity Project’s lawsuit is just one aspect of the ongoing scrutiny surrounding TikTok. The Justice Department has yet to respond to requests for comment on the matter, but the lawsuit’s allegations raise questions about whether the department will investigate the Trump administration’s handling of the TikTok sale. The lawsuit highlights a broader trend of dismantling public integrity and tax units within the Justice Department, raising concerns about the government’s ability to prosecute white-collar crime and hold powerful individuals accountable.

Ballou emphasized that his firm aims to fill the void left by a potentially less active Justice Department, recreating some of the infrastructure for prosecuting corruption outside of government. The outcome of this lawsuit could have significant implications for the future of TikTok in the United States and the broader debate over the regulation of foreign-owned technology companies.