On June 19, 2025, President Trump issued an Executive Order extending the enforcement deadline for the TikTok ban or sale to September 17, 2025.[1] Earlier this year, the Supreme Court upheld a federal law prohibiting TikTok’s operation in the U.S. unless it cut ties with its China-based parent company.[2] Since then, the Trump Administration has been engaged in ongoing negotiations to bring TikTok under American ownership. However, given the political tensions between the U.S. and China, and the fact that this marks the third executive order extending the deadline to close on a deal, the future of these negotiations remains uncertain.
The TikTok Ban & its Many Extensions
Under the Protecting Americans from Foreign Adversary Controlled Applications Act (the “Act”), TikTok was effectively banned for national security concerns unless a deal severed TikTok from the control of China, which the Act described as a “foreign adversary.”[3] The Act essentially issued an ultimatum to the app’s China-based parent company, ByteDance: either sell TikTok or face a nationwide ban.
On the evening of January 18, 2025, the effect of the Act was felt by 170 million American users when TikTok went “dark” in the U.S., albeit for only 12 hours. By January 20, 2025, President Trump exercised his authority under the Act to delay enforcement of the TikTok ban for a 75-day period while the President executed a deal.[4] However, following that initial 75-day extension, no deal was finalized. Instead, two additional executive orders were issued by President Trump, pushing the deal deadline to September 17, 2025.[5] Notably, there is no clear legal basis for the multiple extensions as the Act only permits “a 1-time extension of not more than 90 days.”[6]
Putting aside the unclear legal basis for the multiple extensions, it’s no surprise that a deal has yet to be finalized. TikTok has a multibillion-dollar valuation and is run by a proprietary algorithm that drives exceptional engagement for the 170 million American users hosted on the platform. In addition to navigating the immense scale of this deal, negotiations are occurring under the backdrop of political tension as Congress effectively forced a foreign company to sell its highly valuable intellectual property based on national security concerns with the company’s home country. Furthermore, the broader tariff and trade spat between the U.S. and China has only increased tension and discourse.
Negotiations & Implications
Despite the various obstacles to finalizing a deal, negotiation rumors have speculated about a wide array of potential sale arrangements. In one deal purportedly under consideration, U.S. buyers would acquire the TikTok platform while ByteDance retains ownership of the proprietary algorithm, allowing the new U.S.-based TikTok platform to utilize the algorithm via licensing.
TikTok’s proprietary algorithm functions by recommending videos to a user based on the user’s interactions with the platform. Each interaction a user has on TikTok (e.g., watching a video, following an account, leaving a comment) enables the recommendation. TikTok’s immense popularity essentially hinges on this algorithm’s ability to create a unique user experience; therefore, it is unlikely ByteDance would part ways with it easily. If ByteDance sells the TikTok platform but retains ownership of the algorithm, there is an argument that a licensing arrangement would help maintain the value of TikTok in America because TikTok—without its algorithm—is arguably not TikTok.
However, there is also an argument that such licensing arrangement would not adequately address Congress’ national security concerns since TikTok would not be severed from the control of China. Specifically, ByteDance’s continued association with TikTok through its licensed algorithm would continue to pose the risk of China accessing sensitive data from and manipulating content viewed by the app’s 170 million American users.
Conclusion
Based on the trail of executive orders extending the TikTok sale deadline, as well as the trade tensions between the U.S. and China, it is unclear whether a deal will be finalized by the September 17, 2025, deadline. The U.S. and China are unlikely to rush into any deal when negotiations require careful navigation of both U.S. security concerns and Chinese regulatory approvals. Thus, as it stands, the threat of a TikTok ban in the U.S. will continue to loom on an unclear timeline. It is certain, however, that the outcome of these negotiations will impact how global tech companies think about operating in foreign jurisdictions, and how deals involving the ownership, protection and transfer of powerful algorithms are structured and negotiated.
Cullen and Dykman’s Intellectual Property team continues to monitor important developments regarding the Act and its legal implications on intellectual property rights. Should you have any questions about this legal alert, please feel free to contact Ariel Ronneburger (aronneburger@cullenllp.com), Karen Levin (klevin@cullenllp.com), or Sharlene Cubelo (scubelo@cullenllp.com).
Please note this is a general overview of developments in the law and does not constitute legal advice. Nothing herein creates an attorney-client relationship between the sender and the recipient.
Footnotes
[1] Further Extending the TikTok Enforcement Delay, whitehouse.gov, https://www.whitehouse.gov/presidential-actions/2025/06/further-extending-the-tiktok-enforcement-delay/ (last visited June 23, 2025).
[2] TikTok’s Lights Went Out…And Back On Again…For Now, Cullen and Dykman LLP, https://www.cullenllp.com/blog/tiktoks-lights-went-outand-back-on-againfor-now/ (last visited June 23, 2025).
[3] Pub. L. No. 118-50, div. H.
[4] Exec. Order No. 14166, 90 C.F.R. 8611.
[5] Exec. Order No. 14258, 90 C.F.R. 15209; Further Extending the TikTok Enforcement Delay, supra note 1.
[6] See §2(a)(3) of the Act.