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As Congress has discovered, TikTok poses a serious threat to U.S. national security. It gives the Chinese government access to vast amounts of data on TikTok’s 170 million American users. On Friday, the Supreme Court ruled that Congress’s 2024 Protecting Americans from Foreign Adversary Controlled Applications Act, which requires the sale or closure of TikTok, did not violate the First Amendment.
Nevertheless, the Trump administration will reportedly issue an executive order this week suspending the law for 90 days. According to press reports, Trump aides say he needs time to strike a deal to keep the social media site open.
But such an order could well violate the 2024 Act. The law gave TikTok 270 days to find a buyer or face closure – that period ended on January 19, 2025. Trump has two problems. First, he will take office on January 20, 2025, the day after the sale or divestment requirement has already come into effect. There is no longer a 270-day period to renew. TikTok must close or be sold before Trump takes office. Professors do not give students an extension after a paper’s due date has already passed.
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Second, even if the administration could grant an extension, the 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 TikTok’s divestiture; b) there is “evidence of significant progress” toward a sale; c) “there exist” legal agreements to carry out the sale. None of these three events occurred. In fact, TikTok is now facing the sale or closure of Scylla and Charbidis as it steadfastly refused all overtures for a purchase. Nothing could demonstrate more clearly that the Chinese government views TikTok as an intelligence-gathering device and not simply a commercial venture.
The administration has no legal authority to suspend the sale or closure of TikTok other than that provided by law. Only Congress, and not the executive branch, has the authority to regulate “commerce with foreign nations.” Without that power, an executive order could fall prey to significant legal challenges.
The 2024 law not only regulates TikTok, but also penalizes any companies that “distribute, maintain or update” the app, or provide “internet hosting services.” These provisions appear to be not only the Apple App Store and Google Play, but also all cloud services that host TikTok, such as those from Microsoft, Oracle, Amazon and Google. It can even reach internet providers such as Comcast and Spectrum. The fine for violating the law is up to $5,000 by TikTok user; my calculator lost count when it discovered that the potential fine could exceed $1 trillion.
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The law itself only authorizes the attorney general to charge TikTok and these companies with that penalty. But that wouldn’t be the end of these companies’ problems. First, shareholders (of which I am one) could sue management for allowing their companies to break the law.
Even if there were a small risk that a court would rule that Trump’s executive order was ultra viresA fine that could run into hundreds of billions, if not trillions of dollars, means management could be taking on a risk with an expected value of billions of dollars. A judge could well find that CEOs who continued to support TikTok — and took on such enormous financial risks for little gain — should be liable for mismanagement.
States could be even more threatening to these companies. Attorneys general have the authority to protect consumers living in their states. State law enforces basic consumer fraud laws that prohibit misrepresentation in the sale of products.
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If these companies have the operation of TikTokthey could be violating these consumer fraud laws – they would be providing a product that is illegal under federal law. These companies would be similar to stores that offered medications that had lost FDA approval and were no longer safe and effective.
To make matters worse, the case would be more similar if these companies were selling drugs that Congress ordered off the market. States like Texas and Florida may want to investigate TikTok and the big tech companies that facilitate its distribution and exploitation.
Ideally, President Trump could simply resolve these legal issues by enacting the law. He bears no responsibility for the closure of TikTok; that was a joint decision of Congress on the one hand Chinese Communist Partj, on the other side.
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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 obtain vast amounts of information about Americans to collect.
On this point, Trump’s second term would do well to follow the example of his first term.
