Saving TikTok While Protecting National Security
This Executive Order (EO 14352) approves a negotiated plan to remove TikTok (and certain related apps) from control by its China-based parent, ByteDance, by creating a new U.S.-based joint venture majority-owned and controlled by U.S. persons — a transaction the President finds meets the statute’s definition of a “qualified divestiture.” The EO pauses federal enforcement of the Protecting Americans from Foreign Adversary Controlled Applications Act for 120 days (and announces non-enforcement for prior conduct) to allow the divestiture to be implemented, sets oversight roles for the Department of Justice (DOJ) and CFIUS, and requires technical and data-security safeguards (U.S. data storage, U.S. control of algorithms/code, monitoring by “trusted security partners”). Purpose: to preserve Americans’ continued access to TikTok while addressing national security concerns about foreign adversary control and data access. Potential impact: TikTok can continue operating while a sale/transition proceeds under specified security conditions; DOJ and federal agencies take the lead in oversight and enforcement; app stores and hosting providers receive temporary protection from liability for past and short-term conduct.
Key Points
- 1Determination of qualified divestiture: The President, after an interagency review, concludes the proposed Framework Agreement creates a “qualified divestiture” under the law — removing TikTok and related apps from foreign-adversary control and preventing an “operational relationship” with formerly affiliated entities.
- 2Structure and safeguards required: The Framework Agreement calls for a U.S.-based joint venture majority-owned/controlled by U.S. persons (ByteDance <20% ownership), U.S. control over algorithms, code, and content-moderation, storage of sensitive U.S. user data on cloud infrastructure run by an American company, and monitoring/retraining of recommendation models by trusted security partners.
- 3Temporary non-enforcement by DOJ: The Attorney General is directed not to enforce the Act for 120 days from the EO’s date. The DOJ also is instructed not to pursue penalties for conduct that occurred during that 120-day period or any period prior to the EO (including the period the statute was effective).
- 4DOJ role and representation: The Attorney General (or designee) will be the U.S. Government’s representative under the Framework Agreement, receive information provided under the agreement, issue implementation guidance, and send letters to providers stating there is no liability for covered conduct during the specified periods.
- 5CFIUS and Divestment Order changes: The EO revokes a prior Presidential memorandum, amends a 2020 Divestment Order to make the CFIUS agreement with investor parties the condition under which the earlier prohibition ceases, and authorizes the Attorney General, in consultation with CFIUS, to verify compliance with those agreements.