President Donald Trump, in his first day back in the White House, signed a flurry of executive orders — including one instructing the U.S. attorney general to abstain for a 75-day period from enforcing a federal law that criminalizes the hosting and distribution of TikTok.
Trump, in the order issued Monday (Jan. 20), wrote that “I have the unique constitutional responsibility for the national security of the United States, the conduct of foreign policy, and other vital executive functions.” He wrote that the “unfortunate timing” of the TikTok ban’s Jan. 19 effective date — which makes it illegal to distribute the app in the U.S., because Chinese parent ByteDance has not divested its stake in TikTok — “interferes with my ability to assess the national security and foreign policy implications of the Act’s prohibitions before they take effect.”
Trump’s executive order also instructs the U.S. attorney general “to issue a letter to each [TikTok] provider stating that there has been no violation of the statute and that there is no liability for any conduct” as of Jan. 19 and through the 75-day extension.
However, despite Trump’s order, legal experts say that tech partners who violate the law could still face significant fines — amounting to $5,000 per user, meaning they could socked with as much as $850 billion in penalties (given TikTok’s claim it has 170 million U.S. users).
According to Matt Schettenhelm, Bloomberg Intelligence litigation and policy analyst, providers who are “intentionally violating federal law” in flouting the TikTok ban will see their legal exposure “go from $0 to $850 billion.” That’s “on a promise from a president who flipped 180 [degrees] on this very issue, & under statute of limitations that outlasts his presidency,” Schettenhelm wrote in a post on X. During his first term, Trump unsuccessfully attempted to force ByteDance to sell TikTok to U.S. buyers (also over national security concerns) via executive orders that were shot down by federal courts.
On Sunday, before Trump signed the TikTok ban extension order, Sens. Rick Cotton (R-Ark.) and Pete Ricketts (R-Neb.) warned in a joint statement that violators of the ban will risk “ruinous bankruptcy” if they facilitate TikTok’s U.S. operation or distribution. “Now that the law has taken effect, there’s no legal basis for any kind of ‘extension’ of its effective date,” the senators said.
“Any company that hosts, distributes, services, or otherwise facilitates communist-controlled TikTok could face hundreds of billions of dollars of ruinous liability under the law, not just from DOJ, but also under securities law, shareholder lawsuits, and state AGs. Think about it,” Cotton wrote on X.
TikTok, after shutting down the app in the U.S. on Saturday, restored service on Sunday, citing Trump’s pledge to not enforce the ban as it applies to technology partners. “As a result of President Trump’s efforts, TikTok is back in the U.S.!” TikTok said in a message to users on Jan. 19.
Oracle, which has an agreement to host TikTok’s U.S. user data, appears to be working with TikTok to provide for the continued functioning of the app in the country. (Oracle has not responded to requests for comment.) At press time, TikTok remains unavailable in the Apple and Google app stores.
Alan Rozenshtein, a constitutional scholar at the University of Minnesota Law School, told NPR that Trump’s executive order cannot overturn an act of Congress and that the TikTok ban is currently in legal effect. The president’s order “does not stop, let’s say, Oracle, from violating the law — which, as far as I can tell, it is doing right now,” Rozenshtein said.
According to the 2024 Protecting Americans from Foreign Adversary Controlled Applications Act, in order for the Jan. 19 date to be deferred, the U.S. president must have certified that ByteDance has “binding legal agreements” to divest its TikTok stake. So far, there is no evidence of such a deal.
Trump has said his administration needs the postpone the TikTok ban to work out a solution that will address national security concerns to make the app legal in the U.S.
Trump has proposed that the United States will “have a 50% ownership position in a joint venture” with TikTok’s “current owners and/or new owners,” he wrote on Truth Social on Sunday. He added, “With our approval, it is worth hundreds of billions of dollars — maybe trillions.”
To date, ByteDance has not indicated any willingness to sell TikTok. It’s difficult to imagine the Chinese internet giant suddenly agreeing to cede half of TikTok to the U.S. government, much less China approving such a transaction. ByteDance has said 60% of its ownership is represented by “global institutional investors” including Blackrock, General Atlantic and Susquehanna International Group.
If TikTok were to be 50% owned by the U.S., that obviously would give advertisers pause, according to ad industry analyst Brian Wieser. “Beyond the highly problematic social issue of such a new form of ‘state-controlled media’ coming into existence in the United States, to the extent that the platform sniffed of propaganda, advertisers who would support such a service would find themselves facing a new set of concerns to account for when developing their media plans,” Wieser wrote in his Madison & Wall newsletter.