TakeTok: Does a TikTok Ban Violate the Takings Clause?

University of Chicago Legal Forum Volume 2024 Article 16 2025 TakeTok: Does a TikTok Ban Violate the Takings Clause? Kevin Marien Follow this and additional works at: https://chicagounbound.uchicago.edu/uclf Part of the Law Commons Recommended Citation Marien, Kevin (2025) "TakeTok: Does a TikTok Ban Violate the Takings Clause?," University of Chicago Legal Forum: Vol. 2024, Article 16. Available at: https://chicagounbound.uchicago.edu/uclf/vol2024/iss1/16 This Article is brought to you for free and open access by Chicago Unbound. It has been accepted for inclusion in University of Chicago Legal Forum by an authorized editor of Chicago Unbound. For more information, please contact . TakeTok: Does a TikTok Ban Violate the Takings Clause? Kevin Marien† ABSTRACT In 2024, President Biden signed the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), which required TikTok’s parent company ByteDance to sell TikTok to a company in a “non-adversarial” country or be banned from the United States. TikTok challenged the regulation, in part, as a violation of the Fifth Amendment’s Takings Clause, which would permit the government to ban TikTok so long as it compensates ByteDance. Because PAFACA applies to applications beyond TikTok, it raises a broader question: does the Takings Clase require government compensation for bans on foreign web services? This Comment argues the answer is no. As a regulatory taking, a ban is subject to the Penn Central test. However, there is little guidance from the Supreme Court on how Penn Central applies to regulations of intangible assets or regulations based on national security concerns. In its absence, a contradictory array of lower court opinions has filled the void. This Comment seeks to harmonize those discordant lower court decisions through the example of the TikTok ban. It does so by suggesting that the “reasonable investment-backed expectations” prong of Penn Central should be conceptualized as prescribing an inquiry into (1) whether the ends sought to be accomplished by the government have historical antecedents, and (2) whether the specific means employed by the government are within the reasonable expectations of the specific regulated entity. Under this view of the Penn Central test, the Comment next argues that two nineteenth-century exceptions to the Takings Clause—the contraband exception and national security principle—should be factored into the reasonable investment-backed expectations prong of Penn Central. In so doing, the Comment harmonizes discordant lower court rulings, maintains fidelity to existing Supreme Court precedent, and avoids absurd conclusions that invalidate important regulations. Under this view, a TikTok ban would not constitute a taking. † B.A., The College of William & Mary, 2021; J.D. Candidate, The University of Chicago Law School, 2025. I would like to extend my sincere gratitude to Professor Lior Jacob Strahilevitz for his insightful feedback throughout the process, without which this piece would be incomplete. Many thanks as well to Professor Hajin Kim, who challenged me to approach the piece from new angles. Finally, thank you to the many Legal Forum editors who helped improve this piece with their suggestions. 515 516 THE UNIVERSITY OF CHICAGO LEGAL FORUM I. [2024 INTRODUCTION On April 24, 2024, President Joe Biden signed into law the Protecting Americans from Foreign Adversary Controlled Applications Act. 1 Emphasizing concerns that certain web services, applications, and companies may “present a significant threat to the national security of the United States,” the Act identifies TikTok and its China-based parent company, ByteDance, as national security threats by name and requires the companies to rid themselves of any foreign adversarial control or be banned in the United States. 2 In other words, the Act provides ByteDance with a binary choice: sell off ownership in TikTok to a company based in a non-adversarial country, or be banned. The Act refers to that choice as “qualified divestiture.” 3 TikTok sued within weeks and claimed, in part, that qualified divestiture “effects an unlawful taking of private property without just compensation, in violation of the Fifth Amendment’s Takings Clause.” 4 The Takings Clause prohibits the government from appropriating private property without paying just compensation to the property owner. 5 In effect, TikTok argues that any regulation that takes the form of a qualified divestiture is unconstitutional unless the property owner is compensated. Qualified divestiture is not a new government regulation. In the antitrust context, the government routinely requires alleged monopolies to be broken up. 6 When the government does so, it presents monopolies with a binary choice: sell or be banned. 7 That choice is effectively identical to the one presented to TikTok. 1 Protecting Americans from Foreign Adversary Controlled Applications Act of 2024, Pub. L. No. 118-50, div. H, 138 Stat. 895 (codified with some differences in language at 15 U.S.C. § 9901). 2 Pub. L. No. 118-50, div. H. § 2(g)(3)(B)(ii). 3 Id. § 2(g)(6). 4 Petition for Review of Constitutionality of the Protecting Americans from Foreign Adversary Controlled Applications Act at 62, TikTok Inc., et al v. Garland, No. 24-01113 (D.C. Cir. May 7, 2024). 5 U.S. CONST. amend. V. 6 See Robert W. Crandall, If It Ain’t Broke, Don’t Break It Up, BROOKINGS INST. (June 14, 2000), https://www.brookings.edu/articles/if-it-aint-broke-dont-break-it-up/ [https://perma.cc/ 9VQZ-FBNZ] (providing a brief history of some high-profile antitrust divestiture actions in the twentieth century). For a recent example of an FTC-mandated divestiture, see Press Release, Fed. Trade Comm’n, Statement Regarding Illumina’s Decision to Divest Grail (Dec. 18, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/12/statement-regarding-illuminas-decision-divest-grail [https://perma.cc/GTY4-BS2Q], noting that Illumina was required to divest from its wholly owned subsidiary, Grail. See Illumina, Inc. v. FTC, 88 F.4th 1036, 1044–55 (5th Cir. 2023) (providing a detailed discussion of the FTC’s case against Illumina). 7 15 U.S.C. § 45(I) (providing that any company that violates an order from the FTC shall be subject to penalties including “mandatory injunctions” on its operations). 515] DOES A TIKTOK BAN VIOLATE THE TAKINGS CLAUSE? 517 And, just as the regulation of monopolies generally enjoys bipartisan support, 8 so too does a qualified divestment of TikTok. Although President Biden signed the Act into law, the Act essentially codifies a prior Executive Order by President Donald Trump. 9 Moreover, the Act passed the Senate with majorities of both parties in support. 10 Likewise, there is broad, bipartisan support for extending qualified divestiture beyond TikTok to other applications and services. When President Trump signed the Executive Order banning TikTok, he also signed an Ex (...truncated)