Is TikTok protected by the First Amendment? The Supreme Court will decide

The news: The Supreme Court has said it will hear TikTok’s appeal of a law that would require ByteDance to sell the app to a US buyer by January 19 or be banned in the US.

• The court will hear oral arguments in an expedited hearing on January 10, days before the ban is currently set to take effect. The law allows President Joe Biden to grant a three-month extension for ByteDance to find a buyer.

Potential outcomes: The ultimate outcome of the hearing is uncertain, as the largely conservative court has sometimes crossed partisan lines when dealing with free speech. However, recent First Amendment rulings could provide insight into how the justices might decide.

• In two cases heard earlier this year, Moody v. NetChoice and NetChoice v. Paxton, the court ruled that the government cannot interfere with social media content moderation except under extreme circumstances, but it stopped short of calling two laws attempting to do so unconstitutional.
• In the majority opinion, Justice Elena Kagan wrote, “On the spectrum of dangers to free expression, there are few greater than allowing the government to change the speech of private actors in order to achieve its own conception of speech nirvana.”
• That precedent establishes strong protections for social media speech, but the US government has framed the TikTok ban as an exceptional case. It contends that the app’s ties to the Chinese government represent unique threats that have significant consequences for free speech and national security. Yet much of the evidence supporting this claim is classified, which could weaken the government’s argument.

The fiscal argument: TikTok’s case largely leans on First Amendment claims, but it is also arguing that a ban would significantly harm small US businesses and creators who rely on the platform for income.

• In its appeal, TikTok said small businesses that advertise on the platform could lose $1 billion in just one month should the app temporarily become unavailable (TikTok itself said it could lose 29% of its global ad revenue target).
• That adverse impact on US businesses could be a critical argument for TikTok. Even with the looming ban, TikTok has remained a crucial platform for advertising; we forecast that TikTok will generate $12.34 billion in US ad revenues this year, up 41.2% YoY.

Our take: The expedited hearing means a final verdict on the TikTok ban could arrive sooner than expected. A fiercely divided court and uncertain incoming administration make the outcome hard to predict, but TikTok’s strong position as a marketing channel and recent rulings could work in its favor.