Could Montana's TikTok ban violate free speech rights?

Yahoo Finance tech editor Dan Howley breaks down Montana's TikTok ban, if the ban violates free speech rights, and the technical challenges related to the ban.

Video Transcript

- Montana has become the first state in the US to ban TikTok, but the victory lap for Montana Governor Greg Gianforte may be short-lived. Yahoo Finance's Dan Howley joins us with the details. Dan?

DAN HOWLEY: That's right. This new law, which goes into effect January 1, 2024, would effectively prevent Google or Apple or any App Store provider from allowing users to download TikTok within the state of Montana. Now, there's a few issues here, both-- one First Amendment, one technical. Let me start with the First Amendment issues.

Excuse me. Experts that I spoke to basically said that blocking the app entirely would violate Montanans' First Amendment rights to free speech. And essentially, they say that that's because they're seeking a broad means without trying to first go ahead and provide a narrower means of attacking this problem that they say exists, the idea that China is siphoning American user data from TikTok.

Now, the experts that I spoke to said that a more clear response than just banning TikTok outright would be to set up some kind of national privacy data legislation. So that's something that would be narrower. It wouldn't include banning an app that 150 million Americans use. And it would still allow Google and Apple to provide the app. It would just limit the means for apps, including TikTok rivals like Meta and Twitter, from collecting user data.

Now, that's the First Amendment side of things. Then there's the technical side of things. Basically, this is something that banning an app in an entire state, but a specific state is difficult to do. Now, they could say, OK, your IP address, your internet protocol address, which is basically your address for when you're online telling where you are, could be used as a means for kind of geolocation or your GPS signal. But the problem is that if you are near the border, for instance, of Montana, other states, residents in other states, could be impacted. So they wouldn't be able to download TikTok as well.

The other issue is people could just set up a VPN and then say that they're in-- I don't know-- Venezuela and download TikTok within Montana. So there's no surefire way of this actually seeming to work. The other problem is Apple and Google would be on the hook. It would be $10,000 per violation. So any time a person downloads TikTok, once this goes into effect, Apple and Google would have to pay $10,000, and then an additional $10,000 for each day the violation continues. So they could rack up millions of dollars in fines here because of the app itself.

Now, overall, it doesn't seem like this is going to hold water under scrutiny. There's already a lawsuit being filed by some residents in Montana who are seeking to nullify this law. It really does seem as though it's going to be something that falls to the wayside rather quickly if it's challenged in courts. At least, that's according to these First Amendment experts that I spoke to.

- All right, well, we will have to see. Dan Howley, thanks so much.