TikTok has filed a challenge to the federal government’s Nov. 6 order to wind up its Canadian operations, saying the decision was “driven by improper purposes” and alleging that federal representatives failed to substantially engage with the company during the national security review (NSR) process.
In addition to calling the order “unreasonable” and “grossly disproportionate,” TikTok says it was owed a “heightened duty of procedural fairness.”
In Federal Court filing in Vancouver last week, TikTok asked the court for a stay of the shutdown order during the legal challenge in addition to setting aside the order in general. TikTok also requested relief for its costs in filing the challenge, and any other relief the court may permit.
The Government of Canada ordered the social media giant to wind up its operations in the country after an NSR under the Investment Canada Act (ICA), but did not outright ban the platform itself.
The Nov. 6 statement by Innovation Minister François-Philippe Champagne indicated that the shutdown order aimed to address “specific national security risks” related to the operations of TikTok’s Chinese parent company, ByteDance, in Canada through TikTok Technology Canada, but did not elaborate on the nature of these risks.
TikTok claims it annually contributes millions of dollars to the Canadian economy, and that the shutdown order will result in the termination of hundreds of employees in Canada, as well as the potential termination of over 250,000 contracts with Canadian-based advertisers.
In its filing, TikTok outlines a seemingly sparse correspondence history with the Foreign Investment Review and Economic Security Branch (FIRES) of Innovation, Science and Economic Development Canada (ISED).
RELATED: Citing national security risks, feds order shutdown of TikTok’s Canadian arm but forgo outright ban
TikTok said it learned in August 2020 that it had not provided the required notices under the ICA regarding the establishment of TikTok Canada in 2018. TikTok alleges that from then until Jan. 2023, FIRES indicated it would be best to delay its filings, given TikTok was under review in the United States.
The filing goes on to describe a lengthy process starting in Feb. 2023, when TikTok provided its relevant notices and responded to FIRES information requests, before being notified in Sept. 2023 that an NSR had been ordered. After consenting to a couple extensions of the NSR, TikTok alleges that FIRES’s “substantive engagement” with it ceased in early 2024, despite multiple attempts to engage and signalling its willingness to extend the NSR further.
Audrey Milette
“While we respect the legal process, we stand by our decision to prioritize Canadians’ safety and security.”
Innovation, Science and Economic Development Canada
Finally, TikTok claims it was delivered a form letter in September 2024 that indicated it could submit additional security undertakings to the Minister within three days. When TikTok asked FIRES if it was a specific request for TikTok, TikTok alleges that FIRES indicated it was a general letter sent to all companies under an NSR and did not lead TikTok to believe it needed to submit anything.
In October, TikTok claims it was informed that its decision to not respond to the letter led to the Minister’s decision to conclude the NSR before being ordered to shut down its operations in Canada.
In addition to calling Champagne’s order “unreasonable” and “grossly disproportionate,” TikTok said in the filing it was owed a “heightened duty of procedural fairness.”
“The Minister erred in law and breached TikTok Canada’s rights to procedural fairness by, among other things, failing to substantively engage in the course of the NSR, abruptly concluding the NSR, and depriving TikTok Canada of the chance to fully and fairly benefit from its statutory and procedural rights,” the filing reads.
ISED Press Secretary Audrey Milette told BetaKit in an email statement that the government cannot comment on the case due to the confidentiality provisions in the ICA.
“The Government’s decision was informed by a thorough national security review and advice from Canada’s security and intelligence community,” Milette said. “While we respect the legal process, we stand by our decision to prioritize Canadians’ safety and security.”
RELATED: Canada’s Competition Bureau targets Google for anti-competitive practices
The case has yet to be heard in court.
The federal government has been taking on big tech companies on many different fronts in recent weeks. The order to shut down TikTok was followed by Canada’s Competition Bureau suing Google for what it calls anti-competitive conduct in the country’s online advertising technology sector. The Bureau is seeking an order that would require Google to cease the anti-competitive practices, sell off two of its adtech tools, and a monetary penalty.
This week, Privacy Commissioner of Canada Philippe Dufresne also announced that social media platform LinkedIn agreed to voluntarily pause using the personal information of Canadian members to train its generative artificial intelligence (AI) models. The Privacy Commissioner’s office said in a statement that Dufresne reached out to LinkedIn following media reports that it had started training AI models using the data of individual members without notifying them.
“I welcome the decision by LinkedIn to pause its practice of using the personal information of Canadian LinkedIn members to train AI models while we work with them to get answers to our questions,” Dufresne said in a statement. “Personal information, even when it is publicly accessible, is subject to privacy laws and must be adequately protected.”
Feature image courtesy Solen Feyissa via Flickr.