President Donald Trump issued an executive order on Monday that allows TikTok to continue operating for an additional 75 days, providing relief to its users despite ongoing concerns regarding national security. TikTok’s parent company, ByteDance, has been under pressure to either secure a U.S. buyer or face a ban that was scheduled for January 19. Trump’s action is seen as a potential extension for ByteDance to find a suitable acquirer.
“I must admit I have a soft spot for TikTok,” Trump stated. The CEO of TikTok, Shou Zi Chew, attended Trump’s inauguration earlier that day among notable tech leaders. Having gained nearly 15 million followers on TikTok since joining last year, Trump acknowledged the platform’s influence in connecting with younger voters. However, on Saturday night, TikTok’s 170 million U.S. users experienced a 12-hour outage when the application went offline in anticipation of the congressional-approved ban, which was upheld by the Supreme Court and took effect on Sunday.
Access was restored for existing TikTok users after Trump assured on Monday that the ban would be delayed. Nonetheless, major tech companies Google and Apple have yet to reinstate TikTok in their app stores. Various stakeholders, including business leaders, lawmakers, and influencers who rely on TikTok for income, are monitoring how Trump handles the complex interplay of regulatory, legal, financial, and geopolitical challenges surrounding the platform.
The TikTok ban stems from concerns regarding the app’s data handling and its potential to serve as a conduit for the Chinese government to spy on Americans. These concerns predate Trump’s initial presidency, as he had previously issued executive orders to prohibit interactions with ByteDance and the owners of the Chinese app WeChat in 2020. Although the courts blocked these orders, a law was enacted last year by Congress, reflecting national security worries, mandating that TikTok be banned unless ByteDance divested it to an approved buyer.
This new law, which went into effect on Sunday, imposes fines of up to $5,000 per U.S. user on major app distributors like Google and Apple if they continue offering TikTok post-deadline. Trump announced on Sunday that he had reached out to TikTok’s U.S. service providers, urging them to maintain support for the app while he drafted the executive order halting the ban temporarily. “The order also guarantees that there will be no liabilities for any company that assisted in preventing TikTok from going dark before my order,” he shared on his social networking platform.
The law signed by former President Joe Biden in April allows for a 90-day extension if there is progress toward the sale before the law becomes effective. However, experts such as Sarah Kreps, director of Cornell University’s Tech Policy Institute, are uncertain whether this clause can be applied retroactively. Kreps stated, “Executive orders cannot supersede existing laws, and it is unclear if the new president possesses the authority to extend a law already enacted.” Furthermore, she expressed skepticism about whether any evidence of a potential buyer exists to justify such a delay.
Alan Rozenshtein, a law professor at the University of Minnesota, pointed out that the law empowers the president to determine what constitutes a “qualified divestiture,” potentially giving Trump some latitude in deciding when ByteDance might comply with the requirements outlined in the Protecting Americans from Foreign Adversary Controlled Applications Act.
While ByteDance has consistently claimed it does not intend to sell, Monday’s development showed a potential shift from Beijing’s rigid stance on TikTok, suggesting openness for divestment. During a meeting with Tesla CEO Elon Musk and Vice President JD Vance on the same day, China’s vice president articulated that acquisitions should be made independently based on market dynamics but must adhere to Chinese regulations.
Until recently, it was commonly accepted that China would resist the sale of TikTok, a symbol of its stance against perceived exploitation by the U.S. However, TikTok was a topic in a recent phone conversation between Trump and Chinese President Xi Jinping, although specific details were not disclosed. Trump stated on Monday his desire for the U.S. government to facilitate a deal that would grant the U.S. 50% control of TikTok, mentioning that numerous wealthy individuals have expressed interest in acquiring the platform.
He commented, “America deserves half of TikTok, and with that partnership, it could be worth, you know, around $500 billion. The numbers are astonishing, but it holds little value without a U.S. buyer.”
The enforcement of the ban usually falls to the Justice Department. Trump’s executive order instructs the U.S. attorney general to refrain from taking any action for 75 days to allow his administration to assess the best path forward, which should safeguard national security while preventing a sudden interruption of a significant communication platform.
This approach may prompt legal challenges while also providing crucial breathing room for TikTok. Trump’s initiative to preserve TikTok may create tension with certain Congressional members in the House and Senate who supported the law, which was widely endorsed across party lines. For instance, House Speaker Mike Johnson labeled ByteDance’s ownership as a significant threat and anticipated a complete sale.
Johnson emphasized, “I believe we will uphold the law,” while experts like Kreps believe the lawmakers risk appearing inconsistent if the ban is not enforced. She noted, “This situation highlights the balance of power within the government, emphasizing that we cannot have one individual unilaterally dictate the law.”
Legal experts are also scrutinizing other potential hurdles. Senator Tom Cotton of Arkansas highlighted a variety of agencies that could initiate legal action to enforce the ban. He asserted, “Any firm that engages with TikTok, which is controlled by the Chinese government, could suffer catastrophic liabilities amounting to hundreds of billions of dollars under existing law.”
Despite the stringent scrutiny and potential liabilities, the ongoing discussions surrounding TikTok appear to reflect a standard business atmosphere for the involved tech companies. Legal analyst Gus Hurwitz pointed out that the civil penalties mentioned are not uncommon as companies routinely face similar financial risks.
Nonetheless, the dilemma of abiding by a law surrounded by uncertainty, or risking possible defiance against a president holding substantial federal contracts, could lead to serious repercussions as shareholders hold companies accountable for their decisions. For example, Oracle maintains a share in a $9 billion Pentagon contract aimed at establishing its cloud computing infrastructure.
“In certain scenarios, this could actually emerge as a wise business decision,” Hurwitz stated, “And it might not constitute a breach of duty to shareholders.”
There remain significant questions regarding the stance of companies like Oracle and Akamai Technologies in managing TikTok’s server operations while some competitors like Apple and Google have halted the app’s availability for new users. Responses from these companies have been notably absent. As of 2020, Oracle had claimed a 12.5% stake in TikTok Global, following an agreement to provide cloud computing services for the app.
As of Monday evening, searching for TikTok on Apple’s app store redirects to a notice pointing out, “Apple must comply with laws enacted in the regions where it operates,” while Google’s app store indicates that downloads of TikTok are “on hold due to ongoing U.S. legal requirements.”
