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As determined by Congress, TikTok poses a serious threat to US national security. It gives the Chinese government access to massive amounts of data on TikTok’s 170 million American users. On Friday, the Supreme Court ruled that Congress’s Act of 2024 to protect Americans from apps controlled by foreign adversaries, which requires the sale or shutdown of TikTok, does not violate The First Amendment.
Still, Trump administration will reportedly issue an executive order this week suspending the law for 90 days. According to media reports, Trump aides say he needs time to strike a deal to keep the social network open.
But such an order could violate the 2024 Act. The law gave TikTok 270 days to find a buyer or face shutdown — that time period ended on January 19, 2025. Trump has two problems. First, he takes office on January 20, 2025, the day after the sale or layoff request has already taken effect. There is no remaining 270 day extension period. TikTok must be shut down or sold before Trump takes office. Professors do not give students an extension after the deadline for submitting the paper has already passed.
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Second, even if the administration could grant an extension, its order would not meet the requirements of the law. The April 2024 law requires him to confirm three facts: a) there is a “path” to selling TikTok; b) there is “evidence of significant progress” towards sales; c) “there are” legal contracts for the execution of the sale. None of these three events happened. In fact, TikTok now faces the Scylla and Charbidis of selling or shutting down because it has steadfastly rejected all attempts to buy it. Nothing could show more clearly that the Chinese government views TikTok as an intelligence-gathering device, not just another commercial enterprise.
The Administration has no legal authority to suspend the sale or shutdown of TikTok except as provided by the Act. Only Congress, not the executive branch, has the power to regulate “commerce . . . with foreign nations.” Without that authority, the executive order could fall victim to significant legal challenges.
The 2024 law doesn’t just regulate TikTok — it also punishes any company that “distributes, maintains or updates” the app or provides “internet hosting services.” These provisions seem to include not only Apple App Store and Google Play, but also all cloud services hosted by TikTok, such as those operated by Microsoft, Oracle, Amazon and Google. It could even reach Internet service providers, such as Comcast as Spectrum. The penalty for violating the law is up to $5,000 per TikTok user; my calculator lost count when it discovered that the potential fine exceeded $1 trillion.
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The law itself only authorizes the Attorney General to sue TikTok and those companies for that penalty. But that would not end the problems of these companies. First, shareholders (of which I am one) could sue the board for allowing its companies to violate the law.
Even if there were a small risk that a court could find that Trump’s executive order ultra viresa penalty in the hundreds of billions, if not trillions of dollars means that management could be exposed to risk with an expected value of billions of dollars. A judge could rule that the CEOs who continued to support TikTok — and expose themselves to such huge financial risks for little profit — should be held accountable for mismanagement.
States could prove to be an even greater threat to these companies. State attorneys general have the authority to protect consumers who live in their states. State law enforces basic consumer fraud laws that prohibit misrepresentation in the sale of products.
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If the companies allowed it work of TikTokthey could be violating these consumer fraud statutes – they would be providing a product that is illegal under federal law. These companies would be analogous to stores that offered drugs that had lost FDA approval and were no longer safe and effective.
In fact, to make the case even worse, a more comparable case would be if these companies were selling drugs that Congress had removed from the market. States like Texas and Florida may want to launch investigations into TikTok and the big tech companies that facilitate its distribution and operation.
Ideally, President Trump could resolve those legal issues simply by allowing the Act to go into effect. Not responsible for shutting down TikTok; it was a joint decision of Congress, on the one hand, and Chinese communist party, on the other hand.
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His greater duty is to protect the national security of the United States, which, as he recognized during his first term (when he tried to shut down TikTok without congressional approval), requires blocking China’s ability to collect vast amounts of information about Americans.
On this issue, it would be good if Trump’s second term followed the example of his first term.
