TikTok's Uncertain Future: Service Providers at Risk of Billions in Penalties

The TikTok saga continues to unfold, with the popular social media app's status remaining uncertain despite President-elect Donald Trump's attempts to intervene. Despite Trump's assurances that service providers won't face penalties for supporting TikTok, the legal reality is much more complicated.

As it stands, TikTok is officially banned in the United States starting today, January 19, 2025, until it can be sold to a non-Chinese company. This ban was mandated by a law passed by Congress, which gave the president the option to extend the deadline by 90 days if a deal was announced. However, President Joe Biden declined to use this extension, leaving TikTok's future in limbo.

Despite the clear legal restrictions, TikTok began coming back online in the US on Sunday, suggesting that some service providers may be relying on Trump's assurances on Truth Social that he would delay the ban. However, these assurances are legally flimsy, and companies that choose to support TikTok in defiance of the law could be on the hook for up to $850 billion in penalties.

The risk doesn't disappear just because Trump says it does. TikTok's US service providers, including app stores and content delivery networks, could face $5,000 in penalties per person who uses their services to access the app. And the government has indicated that these penalties could be enforced up to five years later, meaning companies could be penalized under a future president.

So, will Trump-friendly companies risk breaking the law to make the president happy? It's a risky gamble, and one that could invite shareholder lawsuits and other legal challenges. As University of Minnesota Law School professor Alan Rozenshtein points out, "anytime you're voluntarily violating the federal law, you're forcing yourself into a fight over the issue."

The best option for TikTok's service providers to ensure legal cover would be for Congress to pass a new law extending the deadline or ending the ban altogether. However, given the short timeline and the political dynamics at play, this seems like a long shot.

In the end, the fate of TikTok remains uncertain, and the service providers that support it are walking a legal tightrope. While Trump may be willing to bend the rules to keep the app online, the consequences for doing so could be severe. It remains to be seen whether any companies will be willing to take that risk.