President Trump's executive order, issued shortly after his inauguration, attempts to pause the enforcement of a law that mandated the divestment of TikTok's U.S. operations from its Chinese parent company, ByteDance. The order creates a climate of uncertainty and potential legal risk for tech companies, service providers, and shareholders.
President Trump's executive order , issued shortly after his inauguration, has injected a new layer of complexity into the legal landscape surrounding TikTok in the United States. The order attempts to pause the enforcement of a law, passed by Congress last year, that mandated the divestment of TikTok's U.S. operations from its Chinese parent company, ByteDance, by January 19. While the law remains in effect, Trump's order directs the U.S.
Justice Department to delay any enforcement actions for 75 days. This 75-day period also allows service providers such as app stores, Google Play and the Apple App Store, to continue offering TikTok without facing the significant financial penalties outlined in the law. The executive order, however, has created a climate of uncertainty and potential legal risk for various stakeholders. Tech companies caught in the crosshairs face the daunting prospect of defying a law passed by Congress, potentially incurring billions of dollars in penalties, or complying with the president's order, which lacks the binding force of a law. Alan Rozenshtein, a law professor at the University of Minnesota, expressed his concerns regarding the order's effectiveness in a post on the national security publication Lawfare, noting that courts are unlikely to view such promises as legally binding. Rozenshtein highlighted the possibility of future changes in policy or selective enforcement by the administration, creating a precarious situation for companies operating in this space.The divestment law, which enjoyed bipartisan support in Congress, was signed into law by President Biden and upheld by the Supreme Court in January. This legal precedent further complicates the situation, as it underscores the legitimacy of the law and its intended purpose of addressing national security concerns related to Chinese influence. While legal experts suggest that a lawsuit from Congress to enforce the law might face challenges due to its political nature or national security implications, shareholders of service providers could potentially file lawsuits against companies that disregard the law based on Trump's executive order. This opens a new avenue for legal action, further highlighting the complex legal and political terrain surrounding TikTok in the U.S
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