CED Newsletters & Policy Alerts

Action: Executive Order “Application of Protecting Americans from Foreign Adversary Controlled Applications Act to TikTok” 

What it does: The Order delays for 90 days enforcement of a 2024 law which prevented TikTok from operating in the US after January 19 unless it had been sold to a company not based in a “foreign adversary country” as defined by US law as part of a “qualified divestiture.” The Order states that the President intends to pursue a resolution that protects national security while also preserving Americans’ access to TikTok.  

Key Insights: 

• TikTok is one of the most popular social media platforms in the US, boasting more than 170 million users. However, a number of experts have raised concerns that the app’s ownership by a China-based company (ByteDance Ltd.) threatens national security by giving the Chinese government a mechanism for influencing US public opinion, collecting data on Americans, and installing malicious software on US smartphones. For similar reasons, Congress passed a ban on the use of TikTok on US government devices in 2022, codifying earlier administrative action. 

• TikTok sued to block the forced divestiture, arguing that it violated the First Amendment. However, on January 17 the Supreme Court upheld the Act as the law’s “provisions further an important Government interest [national security] unrelated to the suppression of free expression and do not burden substantially more speech than necessary to further that interest.” 

• A variety of potential buyers have expressed interested in buying TikTok, including Elon Musk. Analysts note that the platform could be sold without its proprietary algorithm, significantly reducing its potential value to buyers.  

• While the ban took effect on January 19, TikTok chose not to sell and the ban took effect. However, once the President-Elect announced his intention to grant the delay in enforcement of the law, the app resumed operations in the US, although it apparently remains unavailable for new users on app stores in the US. TikTok’s parent company, ByteDance, is apparently considering options involving a change of control rather than an outright sale or divestiture.