Regardless of what TikTok says in its laudatory pop-up messages, President-elect Donald Trump cannot simply declare an extension of the TikTok ban and protect the US companies that support it from billions of dollars in fines.
Trump apparently wants TikTok to be available for his inauguration on Monday because “Americans deserve” to see the event. But TikTok is officially banned starting today until it sells to a non-Chinese company, and there’s no deal in sight. Violation of this ban could result in Apple and Google app stores, as well as service providers Akamai and Oracle, seeking $850 billion in fines. Despite all this, Trump has reportedly assured the companies that they will not face these fines if they allow TikTok to continue operating. Now, the question is simple: Will Trump-friendly companies risk breaking the law to make the president happy?
TikTok’s status has been uncertain since last night. President Joe Biden said he would not enforce the law on the last day of his presidency, but TikTok said it would go dark anyway. App stores removed it in accordance with the law. Trump then promised to extend the deadline, telling the companies they wouldn’t face penalties — and TikTok immediately returned online with a thank-you note for the President-elect. The problem is that it is not clear that Trump can do what he has promised.
Congress passed a law directly requiring TikTok to divest from parent company ByteDance or face a ban. It included an option for President Joe Biden to extend the deadline by 90 days if a deal was announced; Biden refused to use it. There are only a few options for TikTok to continue operating legally now. The application may be sold and returned under different ownership. Congress could pass a new law that extends the deadline or ends the ban. Or Trump could try to extend it by proving there is an agreement to change TikTok’s ownership — but unfortunately for him, he can’t just sign an order saying a law no longer exists.
This puts the companies in a legal bind. US TikTok service providers risk $5,000 in fines per person who uses their service to access the app. The government told the Supreme Court it could be enforced up to five years later, so they could be penalized under a future president (or Trump himself).
Trump must take action in a way to convince them that this will not happen. Perhaps his best option would be to certify to Congress that TikTok has agreed to sell, then try to trigger the 90-day extension that Biden did not use. (Whether that can be done once the ban starts is debatable, but legal experts say it’s at least possible to argue for it.) “To be clear, he’ll be lying” about the deal, says Professor Alan of the School University of Minnesota Law. Rosenstein. “He will lie to the Congress and that would be the problem of the Congress. But he would still have certified, and so until the court declares that certification invalid, I think the companies would be safe.”
“This would suggest that one post on Truth Social is enough for some companies to continue to voluntarily violate federal law.”
For now, however, Trump’s assurances that it is safe to support TikTok are legally weak. TikTok began coming back online at midday on Sunday in the US, suggesting its service provider Oracle may be relying on Trump’s assurance to Social Truth that he would delay the ban, although the company has not confirmed or commented. “This would suggest that one post on Truth Social is enough for some companies to continue to voluntarily violate federal law,” says Bloomberg Intelligence litigation analyst Matt Schettenhelm. “That’s a surprising development in my opinion, if that’s what’s going on.”
If the companies ARE By breaking the law, they likely have a strong due process defense given Trump’s promises not to enforce it, Schettenhelm says. But “any time you’re voluntarily violating federal law, you’re forcing yourself into a fight over this issue,” he says. “Yes, it’s probably a winnable war, but when it’s a war over $850 billion in exposure, it’s probably better not to get into that war at all.”
Rozenstein says the move could invite shareholder lawsuits — something Senate Intelligence Committee Chairman Tom Cotton (R-AR) warned about, even as Trump encouraged service providers to bring TikTok back online in time for his inauguration. .
“It’s probably a winnable fight, but when it’s a fight over $850 billion in exposure, it’s probably better not to get into that fight at all.”
That said, The power of Trump it may encourage some companies to take calculated risks. “It’s certainly in these companies’ best interest to curry favor with the new administration, and I think it’s conceivable that even $850 billion in liability exposure and even voluntary violation of a new federal law could be worth it to some companies,” says Schettenhelm. “But you wouldn’t normally think that’s a calculation that makes sense.”
If Trump tries to overturn Congress in a way that is illegal, someone with the right to sue can challenge him in court. Who could this be? One option is TikTok users who support the ban and fear the Chinese government getting their data. “Of course, the courts can say, ‘well, then don’t use TikTok,'” Rozenshtein points out. A competitor like Meta might also be able to make a claim, he says. Or a service provider like Apple or Google could try to ask a court to clarify their legal liability, without actually challenging the agreement. But given the efforts of tech companies to avoid antagonizing Trump, that path seems unlikely.
If TikTok’s service providers really want legal cover, then without a true qualified sale — which would take time to come up with, if China even agrees to sell the app — their best option is Congress. That still seems like a long shot, especially on short notice. But now that Senate Minority Leader Chuck Schumer (D-NY) approves an extension, Schettenhelm says, “it’s starting to be imagined that maybe Congress would agree to at least delay the ban or push it. That would be the most legally sound way to do it.”
