TikTok’s service providers still risk billions in penalties for bringing it back online

No matter what TikTok he says in his laudatory pop-up messagesPresident-elect Donald Trump can not only declare an extension of the expiration of the ban on TikTok and protect the American companies that support it from billions of dollars in fines.

Trump It seems that you want TikTok available for its inauguration on Monday, because “Americans deserve” to see the event. But TikTok is officially banned from today until it sells to a non-Chinese company, and there is no deal in sight. Overturning this ban could get the app stores of Apple and Google, as well as service providers Akamai and Oracle, facing potentially $850 billion in penalties. Despite all this, Trump has assured the companies that they will not face these fines if they let TikTok continue to operate. Now, the question is simple: will Trump-friendly company risk breaking the law to make the president happy?

The status of TikTok is uncertain as of tonight. 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 remove in accordance with the law. Afterward, Trump promised to extend the deadline, telling the companies they would not face penalties — and TikTok soon came back online with a thank-you note to the president-elect. The problem is that it is not clear that Trump can do what he promised.

Congress passed a law directly demanding that TikTok surrender from parent company ByteDance or face a ban. It included an option for President Joe Biden to extend the 90-day deadline if a deal was announced; Biden refused to use it. There are only a few options for TikTok to continue working legally now. The app could 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 the certification that an agreement to change the ownership of TikTok is in place – but unfortunately for him, he can’t just sign an order saying that a law no longer exists.

This puts companies in a legal bind. TikTok service providers in the United States risk $5,000 in penalties per person who uses their service to access the app. The government told the Supreme Court that it could be enforced up to five years later, so they could be penalized under a future president (or Trump himself).

Trump needs to take action 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 activate the 90-day extension that Biden has not used. (It is debatable whether it can be done after the ban, but legal experts say it is at least possible to argue for it.) “To be clear, he will lie” about the agreement, says the professor of the University of Minnesota Law School Alan. Rosenstein. “He would have lied to Congress, and that would be the problem of Congress. But he would still have certified, and so until the court declares that that certification is invalid, I think the companies will be safe.

For now, however, Trump’s assurances that he is sure to support TikTok are legally fragile. TikTok started to come back online in the United States on Sunday at noon, suggesting that its service provider Oracle could be relied upon. Trump’s insurance on Social Truth that he would delay the ban, although the company did not confirm or comment. “This suggests that a post on Social Truth is enough for some companies to willingly proceed in violation of federal law,” says Bloomberg Intelligence litigation analyst Matt Schettenhelm. “It’s an amazing development in my opinion, if that’s what happens.”

If companies i am violating the law, they would likely have a strong due process defense given Trump’s promise not to enforce it, Schettenhelm says. But “whenever you’re willingly violating federal law, you’re going to be forced into a fight over the issue,” he says. “Yeah, it’s probably a winnable fight, but when it’s an $850 billion-plus fight in exposure, it’s probably better not to get into that fight at all.”

Rozenshtein says the move could prompt shareholder lawsuits – something that Senate Intelligence Committee Chairman Tom Cotton (R-AR) warnedeven though Trump encouraged service providers to bring TikTok back online in time for his inauguration.

That being said, The power of Trump it could encourage some companies to take calculated risks. “It’s certainly in the interest of these companies to regain favor with the new administration and I guess it’s conceivable that even $850 billion in liability exposure and even willfully violating a new federal law could be worth it for some companies,” says Schettenhelm. “But you usually don’t think that’s a calculation that makes sense.”

If Trump tries to overrule Congress in an illegal way, someone with standing to file a lawsuit could challenge him in court. Who could this be? One option is TikTok users who supported the ban and fear that the Chinese government will receive their data. “Of course, the courts could say: ‘well, then don’t use TikTok,'” points out Rozenshtein. A competitor like Meta might also be able to file a claim, he says. Or a service provider like Apple or Google could try to get a court to clarify its legal liability without actually challenging the deal. But given the tech companies’ attempts to avoid antagonizing Trump, that path seems unlikely.

If TikTok’s service providers really want legal cover, then short of a real qualified assignment – which will take time to disappear, if China also agreed to sell the app – his best option is Congress. That still seems like a long shot, especially at short notice. But now that Senate Minority Leader Chuck Schumer (D-NY) is approving an extension, Schettenhelm says, “it’s starting to be conceivable that maybe Congress will agree to at least delay the ban or push it back. That would be the most legal way to do it.” this”.