Noor Ghuniem, Contributing Member 2024-2025
Intellectual Property and Computer Law Journal
I. Introduction
On January 19, 2025, TikTok, a social media application that has taken the world by storm, faced a major shutdown in the United States.[1] Thousands of content creators flooded the platform with tearful goodbyes to their followers while others raged in frustration.[2] Beyond entertainment value losses, the shutdown gave rise to more significant concerns, including threats to economic livelihood and perceived violations of free speech.[3] The ban fueled an intense political debate, spurring critical lines of questioning about the government’s authority to regulate digital platforms, thereby infringing citizen rights.[4]
Citing national security risks, in April 2024, the U.S. government enacted a law to go into effect on January 19, 2025, mandating the forced divestiture of TikTok from its Chinese parent company, ByteDance.[5] Soon after taking office, President Trump signed an executive order extending the ban’s inception by 75 days, pending a sale of the app to a U.S. entity.[6] Though the ban ultimately lasted only twelve hours, uncertainty looms over whether TikTok will face a permanent shutdown in the United States if the administration cannot facilitate a sale.[7]
This article explores legal precedent for forced divestiture in the technology space, national security justifications, and potential intellectual property and content ownership concerns if a forced sale occurs. Part II provides background on previous divestitures and the anticipated route for TikTok. Part III discusses proprietary information conflicts of interest and the general impact on content creators. Finally, Part IV concludes with what the public can expect at the end of the current 75-day extension on the ban.
II. Background
Forced divestitures are not entirely uncommon in the United States when approaching foreign entities.[8] In 2019, the Committee on Foreign Investment in the United States (CFIUS), a committee in the government that reviews foreign investments in American businesses, expressed national security concerns about the ownership of the dating app Grindr.[9] Beginning in 2016, the Chinese gaming company Kunlun Tech owned Grindr.[10] By 2020, the U.S. increasingly scrutinized app developers over the safety of Americans’ personal data, fearing the Chinese government could use the information to blackmail individuals, including government officials.[11] CFIUS mandated a forced divestiture with a June 2020 deadline.[12] However, Kunlun Tech transferred ownership to an approved investor group, which included U.S. entrepreneurs San Vincent Acquisition LLC.[13]
Significant security concerns without oversight mechanisms provoke forced divesture.[14] In 2003, International Business Machines Corporation (IBM), an American multinational technology company, was acquired by Lenovo, a Chinese-owned technology company.[15] This sale was approved by CFIUS as there were reduced security concerns.[16] For example, Lenovo maintained IBM’s Personal Computer (PC) operations in the U.S., allowing a significant North Carolina hub to continue operations.[17] IBM additionally retained an 18.9% stake in Lenovo, while Lenovo hired former IBM executives, introducing U.S.-based oversight into management.[18] IBM was able to maintain key assets and maintain governance, and the sale occurred despite the company’s access to citizen personal data.[19]
Under the first Trump administration, the government orchestrated a 2020 CFIUS review process on TikTok.[20] The review process begins with either a mandatory or voluntary filing by the parties involved in the transaction.[21] Voluntary filings are often filed due to uncertainty about security concerns, a desire for regulatory “safe harbor,” or the likelihood of government scrutiny, especially in politically sensitive deals like TikTok.[22] Mandatory filings are typically triggered when a transaction involves foreign government investment, critical technologies, or companies handling sensitive U.S. citizen data, which was the case in TikTok’s 2020 CFIUS review that was set into motion due to concerns over Chinese government access to user data.[23] CFIUS then conducts an initial 45-day review to assess potential national security risks.[24] If concerns remain, the process moves to a formal investigation, culminating in a risk assessment presented to the President for a final decision.[25]After CFIUS completed their review citing a risk, President Trump signed an executive order citing the app’s data collection allowed the Chinese Communist Party access to Americans’ personal information, which potentially allowed China to track the locations of federal employees and contractors.[26] He additionally noted the possibility of compiling personal information for blackmail and corporate espionage.[27] Meanwhile, TikTok officials claimed they never turned over any data to Chinese authorities, nor has their government ever attempted to gain access to Americans’ information.[28] However, TikTok servers in Virginia secured user data, with backup storage in Singapore.[29]
The president’s plan was halted when Trump-appointed Judge Carl Nichols for the District of Columbia found the president overstepped his authority in pushing his emergency economic powers to put a wildly popular app out of business.[30] Nichols found the lawyers for TikTok demonstrated that Trump officials failed to adequately consider an obvious and reasonable alternative before banning TikTok, therefore characterizing the crackdown against the app as “arbitrary and capricious.”[31] Trump continued his plans of forcing TikTok into a sale with Oracle by signing extensions of orders mandating ByteDance divest its U.S. TikTok operations or face a ban.[32]
In June 2021, President Joe Biden revoked the previous administration’s executive orders that sought to ban TikTok, instead calling for a comprehensive review of foreign-owned applications to assess potential security risks.[33] This approach aimed to address concerns through thorough evaluation rather than immediate prohibition.[34] Biden ordered the Department of Commerce to launch national security reviews of apps with any links to foreign adversaries.[35] The general theory was that Trump’s executive order violated the First Amendment, but a review from the Commerce Department would prevent such an unlawful action.[36] In 2024, President Biden signed the Protecting Americans from Foreign Adversary Controlled Applications Act, facilitating the ban on January 19 after discovering sufficient security concerns.[37] Despite the Congressional bipartisan support, the bill still faced pushback alleging a First Amendment violation.[38] The ban was nevertheless affirmed by the Supreme Court as a content-neutral regulation with purpose of addressing a strong governmental interest in protecting citizens from potential foreign surveillance.[39]
The 2025 TikTok ban went into action for twelve hours when President Trump signed an executive order providing the app a 75-day extension.[40] In the meantime, users nationwide received a notification from the app’s owners stating, “We are fortunate that President Trump has indicated that he will work with us on a solution to reinstate TikTok once he takes office. Please stay tuned!”[41] This indicates that while TikTok’s future is likely in President Trump’s hands, he has signaled intent to allow the app to stay by seeking out an authorized buyer. [42]
III. Discussion
TikTok Algorithm Issue
The future of intellectual property (IP) and user data remains uncertain.[43] Thousands of creators on the app generate income through their posts, which are rooted in varying types of content that appeal to different audiences.[44] ByteDance funnels proprietary AI algorithms into TikTok, vital to China’s stance in the AI arms race.[45] Proprietary AI in this context means a software or model that is owned and controlled by an organization, with restriction on access by requirement of a license of subscription.[46] This algorithm likely plays a significant role in TikTok’s success, as it is how the app efficiently matches creators and content with intrigued audiences.[47] For example, the “For You Page” recommendation system is powered by a highly sophisticated AI algorithm that can learn and repurpose user preferences at a faster and more accurate rate than competitors.[48] This is not Tiktok’s own technology; the algorithm is ByteDance-owned software that additionally powers other foreign-based apps, such as Douyin, a Chinese version of TikTok, and Toutiao, a Chinese news and content platform.[49] Since the algorithm that powers the app is an asset of ByteDance, it remains unclear whether it will be included in a possible forced sale or if the application will look at a reconstruction.[50]
Precedent exhibits a considerably plausible scenario where the sale could include the entire platform.[51] For example, in the Grindr sale, Kunlun agreed to sell Grindr to an American company, including all data and operations, despite the company’s ownership of other technological businesses with possible overlap in algorithm proprietary information.[52] Conversely, when the U.S. sells and delegates software to companies heavily monitored by foreign adversaries, such as the IBM-Lenovo Sale, a sale in its entirety is typically not possible.[53] When IBM sold its PC division to China’s Lenovo, the U.S. retained control over key software and IP.[54] The sale creates precedent to indicate a situation where TikTok sells the brand and user base, but ByteDance retains the AI, effectively crippling TikTok’s future in the US.[55]
In this alternative, the U.S. could witness a situation similar to Huawei’s and Google’s Android ban of 2019.[56] Here, the U.S. Department of Commerce placed the company Huawei on an “Entity List” for national security concerns.[57] It accused the company of espionage risks and alleged that the Chinese government could use the telecommunications equipment for surveillance.[58] U.S. companies were not permitted to conduct business with Huawei without special approval.[59] At the time, Google had to revoke Huawei’s Android license, meaning Huawei could no longer use Google’s official Android software.[60] In response, Huawei developed its own operating system, HarmonyOS, to replace every area Google was instrumental in operations, but faced a service disruption for several years.[61]
Currently, there is no indication of how the TikTok sale may head. ByteDance has signaled a strong reluctance to sell TikTok entirely.[62] The company considers its AI a “trade secret” and a strategic advantage in the global technology competition.[63] With that, the Chinese government placed TikTok’s AI under export restrictions, meaning ByteDance would need approval from Beijing to transfer it, a request that would likely be denied.[64] Any sale of TikTok would likely exclude the AI recommendation system, forcing the buyer to build a new algorithm from scratch.[65]
The alternatives to a complete sale are licensing a stripped-down version of the AI to a U.S. buyer and selling TikTok’s US operations without the core AI.[66] This would result in the new owner developing a new algorithm.[67] Some bidders have expressed that if they take hold of algorithm development, they will actually improve the application.[68] The Trump administration may also agree to increased transparency of TikTok’s U.S. operations to comply with national security concerns, with more American oversight into at least the personal data collection.[69] The primary options may be a forced divestiture or a series of extensions on the sale, as observed in the past.[70]
Impact on Content Creators
One of the ban’s most detrimental implications is its impact on millions of content creators and influencers whose livelihoods depend on TikTok.[71] Historic precedent has shown negative outcomes.[72] For example, when Twitter took hold of Vine, creators lost the platform overnight in a similar fashion to the recent ban and found themselves attempting to rebuild audiences elsewhere.[73] Many transferred to TikTok.[74]
If an American company purchases TikTok, creators may retain their content and following[75]. Still, monetization policies could change, or a change in algorithm makeup could negatively impact the general efficacy of posting and reaching audiences.[76] Conversely, if ByteDance rejects the sale, the former ban could permanent, and creators would lose their accounts and all unsaved content.[77] They would likely transition to other platforms like Instagram Reels or YouTube Shorts, which could be difficult for niche communities developed on TikTok.[78]
What Can Creators and TikTok Do?
The Takings Clause of the Fifth Amendment states that private property cannot be taken for public use without compensation.[79] Influencers and businesses that have built careers or revenue streams on TikTok could argue that the government’s ban constitutes a regulatory taking and a deprivation of economic value.[80] The challenge to this, however, is that courts have generally not recognized access to social media platforms as “property” under the Fifth Amendment.[81] In Knight First Amendment Institute v. Trump, the court held that social media is technically a public forum, but access to the digital platform is not necessarily a private property right.[82] Furthermore, Lucas v. South Carolina Coastal Council showed a proper use of the Fifth Amendment, indicating application when a regulation destroys the economic use of property.[83] The case established that the Fifth Amendment mainly applies in analysis of physical property, not digital assets.[84]
As a due process claim per the Fifth and Fourteenth Amendments, businesses could claim that the ban violates their right to due process by arbitrarily eliminating their primary revenue source without an opportunity to contest it.[85] The courts, however, would likely be able to easily combat this argument, as access to an application with overarching national security concerns is not necessarily a legally protected due process right.[86]
Influencers could further challenge the ban as a restriction on free speech, arguing that TikTok is a critical platform for expression, particularly for marginalized voices.[87] In Packingham v. North Carolina, the Supreme Court ruled that social media is a crucial space for free speech.[88] Still, it is unclear if banning one platform violates free speech when alternatives exist.[89] National security interests would likely override.[90]
Therefore, while creators and businesses may experience financial losses, courts have generally given broad deference to the government in national security-related cases.[91]
Intellectual Property Issues if TikTok Changes Ownership
Currently, TikTok’s terms of service state creators retain copyright ownership of their content.[92] However, TikTok has a broad license to use, distribute, and modify content posted on the platform.[93] The U.S. owner will likely inherit this broad license if TikTok is sold.[94] Alternatively, if ByteDance refuses to sell, they will still have the broad license, and any information currently collected. [95]
IV. Conclusion
While the future of TikTok in the U.S. is uncertain, a deadline for answering the question of what is next is approaching. Spectators and users can expect to see some major changes in TikTok, whether the direction taken is the likely sale without the proprietary AI or permanent enforcement of the ban.
[1] Madison Malone Kircher, TikTok Faces Final Hours Before U.S. Ban, n.y.times, Jan. 18, 2025, https://www.nytimes.com/2025/01/18/style/tiktok-ban-final-hours.html [https://perma.cc/45PP-CNTA%5D.
[2] Id.
[3] Id.
[4] Id.
[5] Jenny Lyons-Cunha, TikTok Has Dodged the U.S. Ban – For Now. But the Clock Is Ticking., built in (Feb. 4, 2025), https://builtin.com/articles/us-tiktok-ban [https://perma.cc/Y2RQ-PWG7].
[6] Id.
[7] Id.
[8] Carl O’Donnell, Liana B. Baker & Echo Wang, Exclusive: U.S. Pushes Chinese Owner of Grindr to Divest the Dating App – Sources, rueters (Mar. 27, 2019), https://www.reuters.com/article/us-grindr-m-a-exclusive/exclusive-u-s-pushes-chinese-owner-of-grindr-to-divest-the-dating-app-sources-idUSKCN1R809L/ [https://perma.cc/D2RB-CSEW%5D.
[9] Id.
[10] Id.
[11] Id.
[12] Id.
[13] Id.
[14] Id.
[15] Lenovo Completes Acquisition of IBM’s Personal Computing Division, lenovo newsroom (May 1, 2005), https://news.lenovo.com/pressroom/press-releases/lenovo-completes-acquisition-ibms-personal-computing-division/ [https://perma.cc/D59X-6M3Z%5D.
[16] Id.
[17] Id.
[18] Id.
[19] Id.
[20] Bobby, Allyn U.S. Judge Halts Trump’s TikTok Ban, The 2nd Court To Fully Block The Action, npr (Dec. 7, 2020), https://www.npr.org/2020/12/07/944039053/u-s-judge-halts-trumps-tiktok-ban-the-2nd-court-to-fully-block-the-action [https://perma.cc/K3KR-AXBV].
[21] U.S. Dep’t of Treasury, The Committee on Foreign Investment in the United States (CFIUS), u.s. dep’t of treasury, https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfiuss [https://perma.cc/CGJ5-33Y4%5D.
[22] Cooley LLP, CFIUS Overview, Cooley LLP, https://www.cooley.com/services/practice/cfius/cfius-overview [https://perma.cc/N92P-WP6S].
[23] Id.
[24] U.S. Dep’t of Treasury, supra note 21.
[25] Id.
[26] Id.
[27] Id.
[28] Id.
[29] Id.
[30] Id.
[31] Id.
[32] Id.
[33] Michael T. Borgia et al., Biden Administration Rescinds Trump’s TikTok and WeChat Bans, Issues Two Executive Orders Highlighting Policies on Chinese Tech Companies, davis wright tremaine llp (Oct. 26, 2021), https://www.dwt.com/blogs/media-law-monitor/2021/10/biden-tiktok-executive-order [https://perma.cc/PU84-Q949].
[34] Id.
[35] Id.
[36] Id.
[37] Id.
[38] Id.
[39] TikTok Inc. v. Garland, 604 U.S. ___ (2025).
[40] David Shepardson, TikTok Restores US Service After Trump Says ‘We Have to Save It’, reuters (Jan. 20, 2025), https://www.reuters.com/technology/tiktok-goes-dark-us-users-trump-says-save-tiktok-2025-01-19/ [https://perma.cc/VA5J-YLK%5D.
[41] Id.
[42] Id.
[43] Kane Wu & Julie Zhu, Exclusive: ByteDance Prefers TikTok Shutdown in US if Legal Options Fail, Sources Say, reuters (Apr. 25, 2024), https://www.reuters.com/technology/bytedance-prefers-tiktok-shutdown-us-if-legal-options-fail-sources-say-2024-04-25/ [https://perma.cc/LNE5-ZYCZ%5D.
[44] Id.
[45] Id.
[46] SmartDev, Open Source vs. Proprietary AI: Which One Is Right for You?, smartdev, https://smartdev.com/open-source-vs-proprietary-ai/ [https://perma.cc/J45R-NW9].
[47] Kane Wu & Julie Zhu, supra note 36.
[48] Id.
[49] Id.
[50] Id.
[51] Echo Wang, China’s Kunlun Tech Agrees to U.S. Demand to Sell Grindr Gay Dating App, reuters (May 13, 2019), https://www.reuters.com/article/world/chinas-kunlun-tech-agrees-to-us-demand-to-sell-grindr-gay-dating-app-idUSKCN1SJ296/ [https://perma.cc/PE3B-VQR6].
[52] Id.
[53] Id.
[54] Id.
[55] Id.
[56] Angela Moon, Exclusive: Google Suspends Some Business with Huawei After Trump Blacklist, reuters (May 20, 2019), https://www.reuters.com/article/world/exclusive-google-suspends-some-business-with-huawei-after-trump-blacklist-sou-idUSKCN1SP0N7/ [https://perma.cc/HQ5J-J225%5D.
[57] Id.
[58] Id.
[59] Id.
[60] Id.
[61] Id.
[62] Associated Press, TikTok’s Buyers Face a Dilemma: How Much Is the App Worth Without Its Addictive Algorithm?, ap news (Feb. 12, 2024), https://apnews.com/article/tiktok-buyers-divestment-ban-8429dfb422c4cefb6b0807aeb2c5cd56 [https://perma.cc/P82W-EYY2%5D.
[63] Id.
[64] Id.
[65] Id.
[66] Louisa Clarence-Smith, Frank McCourt: I Want to Buy TikTok — and Scrap Its Algorithm, the times (Jan. 15, 2025), https://www.thetimes.com/business-money/article/frank-mccourt-buying-tiktok-ban-net-worth-hjjbn79g2 [https://perma.cc/EAH4-NL7E].
[67] Id.
[68] Id.
[69] Clarence-Smith, supra note 57.
[70] Id.
[71] Amanda Marcovitch, How A Potential TikTok Ban Will Impact Creators And Brands, Forbes (May 10, 2024), https://www.forbes.com/sites/amandamarcovitch1/2024/05/10/how-a-potential-tiktok-ban-will-impact-creators-and-brands/ [https://perma.cc/4NPF-CUY6].
[72] Id.
[73] Id.
[74] Id.
[75] Id.
[76] Id.
[77] Id.
[78] Id.
[79] TakeTok: Does a TikTok Ban Violate the Takings Clause?, U. Chi. Legal F. (Feb. 17, 2025), https://legal-forum.uchicago.edu/print-archive/taketok-does-tiktok-ban-violate-takings-clause [https://perma.cc/3NEF-TSGL].
[80] Id.
[81] Id.
[82] Knight First Amendment Inst. at Columbia Univ. v. Trump, 953 F.3d 216, 217 (2d Cir.2020)
[83] Lucas v. S. Carolina Coastal Council, 309 S.C. 424, 424 S.E.2d 484, 426 (1992)
[84] Id.
[85] FIRE to SCOTUS: TikTok ban violates Americans’ First Amendment rights, fire (Jan. 2025), https://www.thefire.org/news/fire-scotus-tiktok-ban-violates-americans-first-amendment-rights [https://perma.cc/9CWX-WB2T].
[86] Id.
[87] Id.
[88] Packingham v. North Carolina, 582 U.S. 98, 137 S.Ct. 1730, 198 L.Ed.2d 273, 105 (2017).
[89] Id.
[90] Id.
[91] Id.
[92] Terms of Service, TikTok (Aug. 8, 2024), https://www.tiktok.com/legal/page/us/terms-of-service/en [https://perma.cc/D8SM-34PV].
[93] Id.
[94] Id.
[95] Id.
The University of Cincinnati Intellectual Property and Computer Law Journal 
Leave a comment