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By Marilyn Odendahl

The Indiana Citizen

October 4, 2023

Nearly a year after first suing TikTok amid concerns about the Chinese government accessing the user data to spy on Hoosiers, Indiana is fighting to keep the lawsuit alive as the video-sharing app argues the state’s complaint is pre-empted by federal law.

The Hoosier state sued TikTok in December 2022, claiming the app’s China-based parent company violated the Indiana Deceptive Consumer Sales Act by making “false, deceptive and misleading statements.”  Indiana is asking the Allen County Superior Court to prohibit the social medial platform and its parent company, ByteDance Inc., from treating Hoosier consumers “unfairly and deceptively” and to award a monetary civil penalty for each violation of the DCSA.

The lawsuit, filed by Indiana Attorney General Todd Rokita’s office, alleges that TikTok’s statements about its security protocols seek to assure Indiana consumers that there is minimal risk that the Chinese government or Communist Party could access and exploit their data derived from using the app. But Indiana’s lawsuit asserts that TikTok collects personal data, such as users’ contacts, their facial features, their voice prints and the content they create and “has stored U.S. user data, including Indiana consumers’ data,” on servers owned and operated by Chinese companies that are subject to Chinese law.

“TikTok is a wolf in sheep’s clothing,” Indiana asserts in its original complaint. “As long as TikTok is permitted to deceive and mislead Indiana consumers about the risks to their data, those consumers and their privacy are easy prey.”

Indiana successfully blocked an earlier attempt by TikTok to have the case moved from state to federal court even though the federal judge criticized the attorney general for devoting more than 90% of the complaint to “irrelevant posturing.” Now Indiana is fighting the app parent’s effort to have the case dismissed.

TikTok has denied the allegations.

A hearing on TikTok’s motion to dismiss has been scheduled for 9 a.m. Oct. 25 in Allen County Superior Court. Judge Jennifer DeGroote will be presiding.

Even though Indiana alleges TikTok is collecting “highly sensitive and personal information” from Hoosiers who use the app, its complaint stops short of stating the company is funneling the data to the Chinese government and the Chinese Communist Party. Instead, it asserts ByteDance is a Chinese company which must follow Chinese laws, including laws that mandate “secret cooperation with China’s intelligence activities.”

“TikTok thus routinely exposes Indiana consumers’ data, without their knowledge, to access and exploitation by the Chinese Government and Communist Party,” the state’s complaint asserts. “The Chinese Government and Communist Party have demonstrated the intent and willingness to investigate, surveil, harass, and intimidate individuals outside of China, including in Indiana.”

In its brief supporting its motion to dismiss, TikTok, in part, disputes the allegation it deceived Hoosiers about who may have access to their user data.

The company points out Indiana’s lawsuit highlights TikTok’s privacy policy that tells consumers “their data may be shared with individuals and entities subject to Chinese laws.” Also, TikTok disputes that its “failure to specifically reference ‘China’” in its privacy policy could violate the DCSA.

“The fact that TikTok’s privacy policy states that the data may be shared with corporate affiliates outside the United States but does not specifically reference China (or any other country) ‘cannot reasonably be viewed as unfair, abusive, or deceptive,’ particularly in light of TikTok’s other data access disclosures,” the company argues in its motion to dismiss.

First in the nation

Indiana was the first state to sue TikTok, filing two lawsuits on Dec. 7, 2022. In addition to the lawsuit alleging the company misled Hoosiers about the risk of their data being accessed by the Chinese government, the other suit alleged TikTok misrepresented some of its content appearing on third-party app stores.

The lawsuits were consolidated on Dec. 28, 2022, into State of Indiana v. TikTok Inc., ByteDance Inc., TIKTOK PTE LTD et al., 02D03-2212-PL-000401. Indiana filed an amended complaint in June 2023, claiming six violations of the DCSA.

Indiana is not alone in its concerns about TikTok. Other states, along with the White House and Congress, are increasingly raising alarms about the app’s alleged deceptions and the harm the app may cause.

In May 2023, Arkansas filed lawsuits against TikTok and Meta, the parent of Facebook, according to the Associated Press. The complaints assert the companies are misleading consumers about the protections on users’ data and the safety of children on their platforms.

Other states, including California, Kentucky, Massachusetts, Nebraska and Tennessee, launched a joint investigation into TikTok in March 2022. CBS News reported the attorneys general of those states are looking at the potential harm to young users’ mental health.

At the federal level, CBS News reported in March that lawmakers have expressed concern about the collection of user data by ByteDance, while the Biden administration was considering a nationwide ban of TikTok if ByteDance does not divest itself from the app. Moreover the U.S. Department of Justice opened an investigation into ByteDance over allegations of spying on U.S. citizens.

Rokita, Indiana’s attorney general, called TikTok a “clear and present danger,” when he announced the filing of the two lawsuits.

“The TikTok app is a malicious and menacing threat unleashed on unsuspecting Indiana consumers by a Chinese company that knows full well the harms it inflicts on users,” Rokita said in a press release.

To litigate the case against TikTok, Indiana entered into a contingency fee agreement with the Washington, D.C.-based Cooper & Kirk in May 2022. That law firm will represent the state in the lawsuit against the social media app in exchange for a percentage, not to exceed 25%, of any financial award that may be recovered.

Cooper & Kirk is representing other states in investigations and lawsuits against TikTok, including Iowa, South Carolina and Arkansas.

Not a federal case

The attempt by TikTok and ByteDance to move the Indiana case to federal court was rejected by the U.S. District Court for the Northern District of Indiana in May 2023. Judge Holly Brady issued an opinion and order, finding that the state court is the proper venue because the claim is based on state consumer law, not federal law.

However in her ruling, Brady scolded Indiana over the rambling content of the complaint. The judge accused the state of “political posturing” and found that it stretched its single allegation – that TikTok failed to disclose that users’ data may be shared with “individuals and entities subject to Chinese law” – “into a work longer than Kafka’s The Metamorphosis.”

Along with arguing that the lawsuit should be dismissed because Indiana has not alleged that the state was specifically targeted by the app or that Hoosier consumers “detrimentally relied” on the alleged misrepresentations or omissions, TikTok, again, is trying to usurp state law in its motion to dismiss.

The company asserts that the state’s complaint is preempted by federal law because it concerns national security and foreign policy related to China and “intrudes on the field of foreign affairs entrusted exclusively to the federal government.”

By claiming the company made deceptive and misleading statements about the access and exploitation of consumers’ data by the Chinese government and/or Communist Party, “the Complaint seeks to intrude on an area that is plainly entrusted exclusively to the federal government, and therefore is preempted,” TikTok argues.

Indiana counters that TikTok is subject to state law. The company, according to Indiana, does target content and advertisements to Hoosiers through the collection of data to create “an Indiana-specific experience,” and the DCSA does apply because the company collects “copious information from millions of Indiana consumers to great profit.”

In addition, Indiana contends that its complaint does not intrude on the federal government’s foreign affairs power because consumer protection is not the exclusive purview of the federal government.

“Whether TikTok should be allowed to harvest U.S. citizens’ private data and share it with the Chinese is a national-security question,” Indiana asserts in its opposition motion to the video-sharing app’s request for dismissal. “Whether TikTok may deceive Indiana users about the risk that their data will be shared with the Chinese is not. And this case concerns only the latter question.”

The Northern District Court in its order remanding the case to state court was also unconvinced by TikTok’s federal jurisdiction argument.

The company contended the issues raised by Indiana were already being negotiated and litigated with the Committee on Foreign Investment in the United States. But the district court did not see how any ruling in the Indiana case would impact the outcome of the federal proceedings.

“As described by Defendants, the CFIUS proceedings are forward-looking. That is, they will address how Defendants can mitigate national security issues going forward,” Brady wrote. “The complaint, on the other hand, seeks to address alleged misrepresentations that have already occurred.”

Dwight Adams, a freelance editor and writer based in Indianapolis, edited this article. He is a former content editor, copy editor and digital producer at The Indianapolis Star and IndyStar.com, and worked as a planner for other newspapers, including the Louisville Courier Journal.