Why Apple and Others Are Hesitant to Invest in TikTok: 0 Billion Factors at Play

Why Apple and Others Are Hesitant to Invest in TikTok: $850 Billion Factors at Play

This weekend was quite eventful for TikTok. While various reports suggest that TikTok is reinstated, the situation is more complex than it appears.

The app has been removed from the Apple App Store as well as from Google, Amazon, and Microsoft’s platforms. None of those companies have restored it yet.

A recap of the weekend’s developments

On Friday, the US Supreme Court upheld a law that imposes a TikTok ban in the United States, set to go into effect on January 19.

The Biden administration clarified it had no intention to enforce this law during its final 24 hours, leaving the decision to Trump.

Trump initially sought more time to evaluate the situation, leading to TikTok going offline in the US on Sunday. When users tried to access the app, they were greeted with a message indicating that the resolution was expected from Trump after he took office.

We’re sorry, but TikTok is unavailable at the moment. A law prohibiting TikTok has been enacted in the U.S. Unfortunately, this means TikTok is currently inaccessible. We’re fortunate that President Trump has indicated he will address this issue once in office. Please stay tuned!

Apple released a statement affirming its obligation to comply with the law by removing the app from its store.

Later on Sunday, Trump took to social media to announce he would lift the ban as soon as he assumed office the following day, and that companies ignoring the law would not face penalties.

I urge companies not to keep TikTok offline! I will issue an executive order on Monday to delay the law’s prohibitions, allowing us to negotiate a solution for national security. This order will also ensure companies face no consequences for keeping TikTok operational ahead of my order. Americans deserve to enjoy our exciting Inauguration on Monday, along with other events and discussions.

Access to TikTok was reinstated by Bytedance, with US partner Oracle seemingly confident in Trump’s promise regarding liability.

Per our agreement with service providers, TikTok is working on restoring service. We appreciate President Trump for providing the necessary clarity and assurance to our providers, ensuring they face no penalties for offering TikTok to over 170 million Americans.

Apple and Google exercising caution

Despite this, neither Apple nor Google has restored the app in their stores. The rationale was succinctly stated by two senators: the ban is still in effect as Trump has not yet officially taken office.

We commend Amazon, Apple, Google, and Microsoft for adhering to the law by ceasing operations with ByteDance and TikTok, and we encourage other companies to follow suit. This law poses a significant risk of bankruptcy to any company that violates it.

When they mention ‘significant,’ they truly mean it. The law permits app stores to be fined $5,000 per user, potentially amounting to $850 billion. Even for a company as large as Apple, this would be a catastrophic hit.

Several legal experts referenced in Daring Fireball suggest that there is uncertainty regarding whether Trump can actually protect companies from legal liability.

These “service providers” [namely Oracle and its partner for content delivery] must be out of their minds. There’s no guarantee that Trump, who isn’t even president yet, can ensure any protection. I anticipate shareholder lawsuits — Oracle is rapidly accruing billions in potential liabilities.

DMN’s Perspective

Apple made a prudent choice.

Perhaps Trump holds the legal authority to grant immunity from liability for actions taken during a time when he wasn’t in office; perhaps he doesn’t. Perhaps his intentions can be trusted; perhaps they can’t. However, app store providers are appropriately unwilling to take that risk, and their decision is undoubtedly correct.

Apple isn’t really at risk of upsetting its customers. The impending ban was anticipated, so anyone interested in having the app who didn’t already possess it had likely downloaded it prior to this development.

While Apple may risk irritating Trump, the CEO Tim Cook’s significant donation and presence at the inauguration likely mitigate that concern. The iPhone manufacturer can comfortably wait to see how this situation unfolds in the next few days.

Image: DMN

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