Inauguration Day and the TikTok Legal Battle

Today marks Inauguration Day, and amidst the transition of power, the future of TikTok in the United States hangs in the balance. President-elect Donald Trump has announced plans to issue an executive order delaying the enforcement of the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA). This law mandates that TikTok, owned by the Chinese company ByteDance, must either be sold to a U.S.-based entity or face a complete ban. However, there are significant legal hurdles that complicate the President-elect's ability to delay this enforcement.

What is PAFACA and Why Does It Matter?

PAFACA is a law designed to protect national security by addressing concerns over apps controlled by foreign adversaries. Lawmakers believe apps like TikTok pose risks, such as data collection and potential misuse of personal information by foreign governments. The law set a deadline of January 19, 2025, for TikTok to comply by selling its U.S. operations.

However, PAFACA is very specific about extensions. It states that any extension must be granted before the ban takes effect. Since President-elect Trump will only take the oath of office today, January 20, 2025, he would not have the legal authority to delay enforcement retroactively.

Conditions for Extending the Deadline

Even if PAFACA allowed for a retroactive extension, the law outlines three strict conditions that TikTok must meet to qualify for an extension:

1. A Concrete Sale Plan TikTok must present a detailed and actionable plan for selling its U.S. operations.
2. Demonstrable Progress There must be clear evidence that steps toward completing the sale are already underway.
3. Binding Legal Agreements Agreements with a buyer must be finalized and ready to implement.

Unfortunately, TikTok has not met these conditions. Instead, ByteDance has resisted the law's requirements, arguing that the ban is unnecessary. As a result, PAFACA does not support an executive order to delay the sale or closure of TikTok.

What Does This Mean for U.S. Companies?

The uncertainty surrounding TikTok creates potential legal risks for U.S. companies that interact with the platform. Businesses such as Apple, Google, Microsoft, Amazon, and Oracle could face serious consequences, including:

• Massive Fines: Companies could be fined for hosting or supporting a platform deemed illegal under federal law, with penalties potentially reaching hundreds of billions of dollars.
• Shareholder Lawsuits: Investors might sue these companies for failing to comply with federal law, which could harm their financial performance.
• State Investigations: Attorneys general from various states might investigate why these companies allowed an app labeled as illegal to continue operating.

This means companies must carefully evaluate their involvement with TikTok to avoid costly legal battles.

What’s Happened Recently?

On January 17, 2025, the U.S. Supreme Court upheld PAFACA, affirming the deadline for ByteDance to sell TikTok’s U.S. operations. By January 18, TikTok had gone offline in the United States, with the app disappearing from app stores and content becoming inaccessible.

However, on January 19, TikTok restored its service after President-elect Trump announced his intention to delay enforcement via an executive order. While this may provide temporary relief for TikTok users, it does not resolve the legal uncertainty. Without meeting PAFACA’s conditions or obtaining proper authority, this executive action may not hold up in court.

Conclusion: Where Do We Go From Here?

The situation with TikTok highlights the complex intersection of national security, business interests, and law. While President-elect Trump’s proposed executive order aims to delay enforcement, the strict requirements of PAFACA and the timing of the presidential transition make this a legally shaky proposition.

For companies and users, the uncertainty is far from over. Businesses involved with TikTok should proceed cautiously, consulting legal experts to navigate this evolving issue. The stakes are high—not just for TikTok, but for the broader tech industry as it grapples with questions of security, sovereignty, and the rule of law.

As we move forward, one thing is clear: the story of TikTok in the United States is far from finished.