Here's a legal twist in the long-running TikTok saga that feels almost inevitable in retrospect. Two investors have decided they're not happy with how the whole "make TikTok American" thing played out, and they're pointing the finger at some very recognizable names.

Former President Donald Trump (DJT) and Attorney General Pam Bondi are now defendants in a lawsuit filed by two shareholders who think the approved deal to spin TikTok off into a separate, American-owned company was, well, unlawful. The plaintiffs are Zhaocheng Anthony Tan, who has stakes in Alphabet (GOOGL), and Garrett Reid, a shareholder in Meta (META). They filed the suit on Thursday.

Their argument boils down to this: a law was passed (the so-called "TikTok Law") that said ByteDance, TikTok's Chinese parent company, had to sell its U.S. assets or face a ban. The deal that got the green light, they claim, doesn't actually achieve that goal. Instead, they argue it lets ByteDance keep calling the shots on all the important stuff, which kind of defeats the whole purpose.

The lawsuit was filed by an organization called The Public Integrity Project, which is making that exact case. And for Tan and Reid, this isn't just a theoretical policy debate. They say the approval of this deal has directly hurt them financially as investors in companies that compete with TikTok. It has created, in their words, a "legal impediment to [their] financial recovery."

So what do they want? The lawsuit aims to force a renegotiation of the deal. A specific concern mentioned is preventing Trump administration allies from having the power to censor political content on one of the world's biggest social media platforms. It's worth noting what they don't want: the lawsuit is not trying to get a U.S. ban on TikTok enforced.

The Long and Winding Road to This Lawsuit

To understand why someone would sue over this now, you have to rewind through years of political football. U.S. national security worries about TikTok first popped up in a big way back in 2019. The fear was that China's laws could force companies like ByteDance to hand over user data to the government in Beijing.

In 2020, then-President Trump tried to ban the app outright and ordered ByteDance to sell its U.S. TikTok stake. That order got tied up in legal challenges and extensions. Fast forward to 2024, and a new law was passed—signed by President Joe Biden—giving ByteDance a deadline: sell by January 2025 or get banned.

But then the plot thickened. Trump, after making a hugely popular debut on TikTok himself (racking up over 16 million followers by late 2025), won a second term. Once back in office, he chose to delay enforcing that 2024 law to allow more time for negotiations. Bondi told companies they wouldn't face liability for continuing to use TikTok in the meantime.

Finally, in January 2026, a deal was struck. ByteDance agreed to create a majority American-owned joint venture for TikTok after divesting 80% of its U.S. assets. The deal had big-name backers like Oracle Corp (ORCL), Silver Lake, and MGX. Trump celebrated it, saying he was happy to help secure TikTok's future in the U.S.

But for these two investors, that celebrated deal is the problem. They're betting a court will see it their way and decide that the approved arrangement doesn't pass the legal smell test, leaving them with a claim for damages. It's a novel argument—shareholders in competing companies suing over a rival's regulatory approval—that adds another layer to the already complex legal and political battle over one of the world's most popular apps.