Despite President-elect Donald Trump's assurances, TikTok's service providers, including Apple and Google's app stores, as well as Akamai and Oracle, still risk billions of dollars in penalties for bringing the app back online. The risk of fines, which could reach up to $850 billion, remains even after Trump reportedly told companies they wouldn't face penalties if they let TikTok continue operating.

The uncertainty stems from the fact that TikTok is officially banned starting January 19, 2025, until it sells to a non-Chinese company, and there is no deal in sight. Flouting the ban could result in massive fines for the service providers, which could be enforced up to five years later, even under a future president. This has put companies in a legal bind, as they weigh the risks of supporting TikTok against the potential consequences of violating federal law.

Trump's promise to extend the deadline is seen as legally flimsy, as Congress passed a law directly demanding TikTok divest itself from parent company ByteDance or face a ban. The law included an option for President Joe Biden to extend the deadline by 90 days if a deal was announced, but Biden declined to use it. Now, TikTok's only options to legally keep operating are to be sold and come back under different ownership, have Congress pass a new law extending the deadline or ending the ban, or have Trump certify a deal to change TikTok's ownership – but this would require convincing Congress, which is unlikely.

Legal experts say that Trump's assurances are not enough to protect companies from fines, and that they would likely have a strong due process defense if they were to be penalized. However, this would still require a lengthy and costly legal battle, which companies may want to avoid. "It's probably a winnable fight, but when it's a fight over $850 billion in exposure, it's probably better to not have to get into that fight at all," said Bloomberg Intelligence litigation analyst Matt Schettenhelm.

Some companies may still take calculated risks to curry favor with the new administration, despite the potential legal consequences. However, this could invite shareholder lawsuits, as warned by Senate Intelligence Committee Chair Tom Cotton (R-AR). University of Minnesota Law School professor Alan Rozenshtein noted that Trump's move could be seen as an attempt to overrule Congress, which could be challenged in court by parties with standing to sue, such as TikTok users who supported the ban or competitors like Meta.

If TikTok's service providers want legal cover, their best option may be to push for Congress to pass a new law extending the deadline or ending the ban. This seems like a long shot, especially on short notice, but Senate Minority Leader Chuck Schumer's (D-NY) endorsement of an extension has made it a more conceivable option. As Schettenhelm noted, "it starts to be conceivable that maybe Congress would agree to at least delay the ban or push it back. That would be the most legally sound way to do this."

In the meantime, TikTok's service providers are left to navigate the legal uncertainty, weighing the risks and benefits of supporting the app. As the situation continues to unfold, one thing is clear: the stakes are high, and the consequences of violating federal law could be severe.