Short answer: Probably not on his own. He likely needs Parliament’s help. But why are we talking about banning TikTok?
As many of our readers know, President Trump has been trying to ban TikTok for months now. On August 6, 2020, President Trump issued executive order 13942 giving authority to his Secretary of Commerce to decide which transactions with TikTok were prohibited. Then, on August 14, 2020, the President issued another executive order ordering TikTok’s owner to “divest” all interests and rights to TikTok. Some call this the “shakedown”.
Afterwards, on September 24, 2020, the Secretary declared which transactions with TikTok were prohibited. Some of those transactions include hosting the app on the Google and Apple play stores, updating the app, posting content, etc. Practically speaking, TikTok was banned.
But can the President do this? Sort of.
The President relies on the International Emergency Economic Powers Act (“IEEPA”), which gives the President immense authority to declare a national emergency and to target a foreign entity. Once a threat has been targeted, the President may:
“regulate, direct and compel, nullify, void, prevent or prohibit, any . . . transfer . . . of, or dealing in, . . . or transactions involving, any property in which any foreign country or a national thereof has any interest . . . with respect to any property, subject to the jurisdiction of the United States.” 50 U.S.C. § 1702(a)(1)(B).
Broad, right? Well, there are limitations. Some of which are alleged to apply here, such as the inability to prohibit certain types of personal communications.
As of now, TikTok’s owner has not sold TikTok, and the owner is still negotiating with the US government and several other companies like Oracle and Walmart. As for the Secretary’s rule effectively banning TikTok—that rule has been subject to constant litigation.
The latest decision (TikTok, Inc. v. Trump) was handed down on Dec. 6 where Judge Nichols of the US District Court ordered a preliminary injunction stopping the US government’s ban. His reasoning was that TikTok succeeded in proving that the “government likely exceeded IEEPA’s express limitations” and that the secretary’s action was arbitrary and capricious because the secretary failed to look at “obvious” alternatives to an outright ban. So apparently, even though the President has broad power under the IEEPA, his way of implementing the ban was improper.
Okay, but could the Canadian Prime Minister do this?
We are skeptical that he could “ban” TikTok on his own. Whereas the President is relying on authority passed to him by Congress (and yet he is still being challenged in the courts), the Prime Minister could rely on several laws to take decisive action, but not likely to the same extent.
For example, the Emergencies Act strictly defines the type of emergencies the Prime Minister could declare and take action to address. For example, it allows the Prime Minister to declare a “public order emergency,” which is an “emergency that arises from threats to the security of Canada that is so serious as to be a national emergency.” The Act continues and then defines “threats to the security of Canada” as a laundry list of items:
(a) espionage or sabotage that is against Canada or is detrimental to the interests of Canada or activities directed toward or in support of such espionage or sabotage,
(b) foreign influenced activities within or relating to Canada that are detrimental to the interests of Canada and are clandestine or deceptive or involve a threat to any person,
(c) activities within or relating to Canada directed toward or in support of the threat or use of acts of serious violence against persons or property for the purpose of achieving a political, religious or ideological objective within Canada or a foreign state, and
(d) activities directed toward undermining by covert unlawful acts, or directed toward or intended ultimately to lead to the destruction or overthrow by violence of, the constitutionally established system of government in Canada,
These are broad; but could they be used by the Prime Minister to ban TikTok? Maybe. We are skeptical.
There is also the Investment Canada Act, which allows the government to stop investments that are injurious to national security. For example, in 2015, the federal government stopped a Chinese company from building a factory in Québec near the headquarters of the Canadian Space Agency. However, TikTok is not really “investing” in Canada. So, this Act is not likely the winner.
We could analyze federal laws all day long, after all, we are a law firm! However, it is equally important to understand the practical and political reasons as to why TikTok is under this scrutiny, and what your company can do to avoid this same fate.
The short answer is citizens and governments alike are waking up to the importance of privacy. There are allegations that TikTok violates the privacy rights of individuals. For example, TikTok agreed to pay $5.7 million to settle Federal Trade Commission allegations that it illegally collected the personal information of children. That is a lot of money to settle a very serious claim. TikTok is also accused of mishandling user data and peddling it to China.
PIPEDA governs the data privacy of Canadians. When a business mishandles personal information, the business could be subject to fines. PIPEDA appoints a Privacy Commissioner to protect the privacy rights of Canadians. However, the Commissioner is not an officer. The Commissioner is merely an investigator who then asks the federal courts—the officer—to dish out fines. Practically speaking, if TikTok was mishandling personal information and refused to comply with the Commissioner, the Commissioner could not “ban” TikTok. The Commissioner would have to seek the courts help.
Some could argue that the Commissioner needs more power—perhaps the power to establish minimum privacy standards for software that, if violated, would prevent the software from entering the market similar to how the Canadian Food Inspection Agency prevents certain unsafe foods from entering the market. But this is not the current legal regime in Canada. However, with the advent of Bill C-11, the Commissioner may be getting some more power soon. But explaining that Bill is best left for another blog post.
What is the lesson here?
Safeguard your customers data! Don’t focus on your bare minimum obligations. Focus on meeting higher standards to protect the privacy of your clients. Otherwise, your business could fall into public scrutiny, just like TikTok, WeChat, and even Desjardins in our latest class action. We at Siskinds are here to help you prevent that from happening.
This article was written in collaboration with co-author Savvas Daginis, student-at-law.