TikTok is moving closer to disappearing from the US, after a panel of federal judges decided to uphold a new law that could lead to a ban on the popular Chinese-owned video app in mid-January.

Three judges on the U.S. Court of Appeals for the District of Columbia Circuit rejected TikTok’s bid to overturn the ruling, a decision that could be seen as a fatal blow to the app in one of its largest markets. More than 170 million Americans use TikTok for entertainment and information, making it a cultural phenomenon.

The app’s impending removal in the U.S. has raised particularly grave concerns among free-speech advocates or those who rely on TikTok for income. The decision also raises new questions for President-elect Donald Trump, who has repeatedly expressed his support for the app but has offered no clear path to rescue it.

The law, signed in April, requires owner ByteDance to sell the app to a non-Chinese company by January 19 or face a ban in the United States. TikTok, which has been in the crosshairs of politicians since 2020, has said a sale is impossible. The company argues that the law unfairly singles out TikTok and infringes on the First Amendment rights of American users.

The justices disagreed with TikTok’s argument, saying the law was designed to address the issue of controlling a foreign competitor and therefore did not violate the First Amendment.

“The government acted to protect liberty and limit its ability to collect data on the American people,” the judges wrote on Friday.

It’s unclear exactly what happens next for TikTok. Experts predict the company will appeal, though there’s no guarantee the judges will take it.

It’s also unclear what Mr Trump’s next move will be. A spokesman said in November that “he will be working on a plan to save the app,” but did not provide many details.

US lawmakers say TikTok poses a national security threat, according to ByteDance. Chinese government oversight of private companies would allow them to use the app to collect sensitive information about Americans or spread disinformation, although there is no public evidence that this has happened.

“The Supreme Court, which doesn’t want to see the app shut down on January 19, will freeze the law, then turn it over to the Trump administration and the Justice Department to figure out what to do,” said Anupam Chander, a professor of law and technology at Georgetown University, one of the experts who expects the Supreme Court to take up the case and prolong TikTok’s future in the US.

Chief Justice Sri Srinivasan previously acknowledged the app’s popularity and noted that without the sale, many Americans could “lose access to a community-based, income-generating vehicle.

Steven Mnuchin, former Treasury secretary during Mr Trump’s first term, said in March that he was “trying to put together a team to buy TikTok” because the app should be owned by American businesses.

Billionaire Frank McCourt also expressed interest in May. Other rumored suitors include Bobby Kotick, former CEO of video game company Activision Blizzard.

But a potential sale would face significant hurdles — financial, technical, and political. TikTok could cost more than $200 billion, and many potential buyers would likely face antitrust scrutiny.

TikTok’s parent company ByteDance has previously said it would rather shut down the app than sell itself, in case the company has exhausted all legal options to fight the law banning the platform from US app stores.

Sources close to ByteDance say the algorithm TikTok relies on to function is considered core to ByteDance’s entire operations, making a sale of the app and its algorithm highly unlikely. TikTok accounts for only a small portion of ByteDance’s total revenue and daily active users, so the parent company would rather shut down the app in the US in a worst-case scenario than sell itself to a US buyer.

Theo: The NY Times, WSJ