Trump Approves TikTok Divestiture Plan, Delays Enforcement for 120 Days

US President Donald Trump has determined that a proposed restructuring of TikTok’s US operations qualifies as a “qualified divestiture” under a 2024 law designed to address national security concerns surrounding applications controlled by foreign adversaries.

Under an executive order, Trump said TikTok’s US operations would be transferred to a newly established joint venture based in the United States and controlled by US persons. ByteDance Ltd. and its affiliates would hold less than 20 percent of the new entity, with the remaining ownership held by other investors.

The arrangement is intended to allow TikTok to continue operating in the United States while addressing the national security concerns that prompted Congress to pass the Protecting Americans from Foreign Adversary Controlled Applications Act.

The order says the new joint venture would control TikTok’s algorithms, source code and content-moderation decisions. Sensitive US user data would be stored in a cloud environment operated by an American company rather than in a way that would place the data under the control of a foreign adversary.

The proposed structure would also subject software updates, algorithms and data flows to monitoring by US-approved security partners. Recommendation models that use US user data would be retrained and monitored by those partners, according to the order.

Trump said the measures would address concerns over potential misuse of American user data and foreign influence while preserving access to TikTok for its estimated 170 million US users. The order also covers ByteDance-related applications including Lemon8 and CapCut.

The decision follows an interagency review led by Vice President JD Vance in consultation with the National Security Council, the Office of Science and Technology Policy, and the departments of the Treasury, Justice and Commerce, as well as the Office of the Director of National Intelligence.

The review included briefings from national security officials and experts, interagency deliberations and negotiations with outside parties, according to the order.

The law originally required the restrictions on foreign adversary-controlled applications to take effect on January 19, 2025. Trump subsequently issued several orders delaying enforcement, with the latest extension running through December 16, 2025.

Under the new order, the Justice Department will not enforce the law or impose penalties for 120 days from the date of the order, allowing time for the proposed divestiture to be completed.

The department is also directed to issue guidance confirming that covered providers will not face liability for conduct during the 120-day period or for conduct dating back to the law’s effective date and preceding the new order.

The order further directs the Attorney General to represent the US government under the framework agreement and receive information from the new joint venture and its security partners concerning compliance.

Trump also amended a 2020 order concerning ByteDance’s acquisition of Musical.ly, which was later incorporated into TikTok. The amendment allows the prohibition associated with that order to cease if the Committee on Foreign Investment in the United States enters into an agreement with certain investors consistent with the framework for the proposed TikTok restructuring.

Source: FSX Business News