JOHN YOO: A big TikTok consideration Trump needs to prioritize on Day One

As Congress has found, TikTok represents a serious threat to U.S. national security.  It allows the Chinese government to access vast troves of data on TikTok’s 170 million American users.  On Friday, the Supreme Court held 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 reportedly will issue an executive order this week suspending the law for 90 days.  According to press accounts, Trump aides say he needs time to make a deal to keep the social media site open.

But such an order may well violate the 2024 Act.  The law gave TikTok 270 days to find a buyer or face a shut down – that time period ended on January 19, 2025.  Trump has two problems.  One, he takes office January 20, 2025, on day after the sale-or-divest requirement has already taken effect.  There is no 270-day period left to extend.  TikTok must close or be sold before Trump took office.  Professors don’t 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, its order would not meet the requirements of the law.  The April 2024 Act requires him to certify three facts: a) there is “a path” to TikTok’s divestiture; b) there is “evidence of significant progress” toward a sale; c) “there are in place” legal agreements to execute the sale.  None of these three events have occurred.  In fact, TikTok now faces the Scylla and Charbidis of sale or closure because it steadfastly refused all overtures for a purchase.  Nothing could show more clearly that the Chinese government considers TikTok to be an intelligence-gathering device and not just another commercial enterprise.

The administration has no legal authority to suspend the sale or closure of TikTok other than that provided by the Act. Only Congress, not the executive branch, has the authority to regulate “Commerce … with Foreign Nations.”  Without that power, an executive order could well fall prey to significant legal challenges. 

The 2024 Act does not just regulate TikTok – it also punishes any companies that “distribute, maintain, or update” the app, or provide “internet hosting services.” These provisions appear to include not just the Apple App Store and Google Play, but also any cloud services that host TikTok, such as those operated by Microsoft, Oracle, Amazon, and Google.  It might even reach internet service providers, such as Comcast as Spectrum.  The fine for violating the law is up to $5,000 per TikTok user; my calculator lost count when it found the possible penalty reaching over $1 trillion.

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The law itself only authorizes the attorney general to sue TikTok and these companies for that penalty. But that would not end these firms’ troubles.  First, shareholders (of which I am one) could sue management for allowing their companies to violate the law. 

Even if there were a small risk that a court might find that Trump’s executive order was ultra vires, a penalty running into the hundreds of billions, if not trillions of dollars, means that management could be running a risk with an expected value of billions of dollars.  A judge could well rule that CEOs who continued to support TikTok – and run such massive financial risks for little gain — should be liable for mismanagement. 

States could prove even more threatening to these companies.  Attorneys General have the authority to protect the 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 these companies allowed the operation of TikTok, they 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 their FDA approval and were no longer safe and effective. 

In fact, to make the case worse, the more comparable case would be if these companies were selling drugs that Congress had ordered off the market.  States like Texas and Florida may want to open investigations into TikTok and the major tech companies that facilitate its distribution and operation.

Ideally, President Trump could solve these legal issues simply by allowing the Act to go into effect. He bears no responsibility for TikTok’s closure; that was a joint decision by Congress, on the one hand, and the Chinese Communist Party, on the other. 

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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 in office (when he tried to shut down TikTok without Congress’s consent), requires blocking China’s ability to collect massive amounts of information on Americans. 

On this question, Trump’s second term would do well to follow the example set in his first term.

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