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Trump’s executive order gives TikTok a reprieve. What happens next? - AP News

📱 A Montana judge dismissed the state's TikTok ban case on Feb. 20, effectively voiding the restriction before it took effect.

⚖️ U.S. District Court Judge Donald Molloy ruled based on a clause in the law that voided the ban if ByteDance sold majority control to a non-Chinese company.

🤝 The ownership transfer from China-based ByteDance was completed in January, satisfying the condition set by Montana Governor Greg Gianforte's 2023 legislation.

🗣️ Montana Attorney General Austin Knudsen praised President Trump for securing an American company to purchase TikTok and end data access concerns for Montanans.

⛓️ The Montana law was originally passed in May 2023 with Republican support but faced immediate legal challenges citing First Amendment violations.

🔒 Federal scrutiny increased during the Biden administration, including a mandate for government agencies to delete the app and a Congressional hearing on data privacy.

🛑 A federal ban signed by Biden required TikTok's sale within 270 days, leading to a temporary block of American users on Jan. 18, 2025.

📜 President Trump issued executive orders in early 2026 extending the sale window four separate times until ByteDance finalized the deal on Jan. 23, 2026.

💼 New investors include Oracle, Silver Lake, and MGX, while ByteDance retains a 19.9% ownership stake after the restructuring.

⚠️ Cybersecurity expert Timothy Edgar warns that the ownership transfer may give users a false sense of security regarding data privacy.

🔍 Experts argue that focusing on ownership rather than data protection mechanisms could leave TikTok vulnerable to Chinese data access risks.

🏛️ Edgar's amicus brief highlighted significant restrictions TikTok previously agreed to under U.S. Committee on Foreign Investment pressure.

Bullish Signals
  • TikTok Inc. successfully transferred majority ownership to non-Chinese investors including Oracle, Silver Lake, and MGX in January 2026, resolving legal challenges and avoiding the federal shutdown.
  • Montana state judge Donald Molloy dismissed the state ban case on Feb. 20, allowing TikTok to operate freely following the ownership change.
  • Attorney General Austin Knudsen praised President Trump's executive order and business experience for successfully finding an American company to purchase TikTok, preventing foreign adversaries from spying on Americans.
Risk Factors
  • Legal experts question whether the forced sale of ByteDance's stake to a non-Chinese entity truly mitigates national security concerns regarding Chinese access to American user data.
  • regulatory concern
  • high
  • Cybersecurity expert Timothy Edgar argues that TikTok could now face less oversight and reduced pressure to uphold data safeguarding requirements following the ownership transfer.
  • oversight risk
  • medium
  • Edgar warns that the dilution of Chinese ownership may put users in a worse position than before, as the focus shifted from 'who owns' the company to 'how countries get ahold of data'.
  • security vulnerability
  • high
  • The federal government continues to scrutinize TikTok, with Biden having already banned the app for agency employees and mandated Congressional hearings on CEO Zi Chew's data privacy practices.
  • regulatory scrutiny
  • medium
Full Analysis
A Montana federal court case over the state's TikTok ban has been resolved, rendering the legislation moot due to a change in TikTok's ownership structure. U.S. District Court Judge Donald Molloy dismissed the legal challenge on February 20 after a clause within the law signed by Governor Greg Gianforte in May 2023 voided the ban if ByteDance transferred majority ownership away from a designated foreign adversary. This condition was met when Oracle and other investors finalized a deal on January 23, 2026, leaving ByteDance with only a 19.9% stake in the platform. The dismissal ended years of litigation involving Montana users and Chinese owner ByteDance against Attorney General Austin Knudsen's state defense, which cited national security concerns over data privacy as the primary motivation for the original legislation. The legal resolution coincides with significant executive actions taken by President Trump regarding TikTok's future in the United States. In March 2025, following a temporary block of American users on January 18, 2025, which threatened to activate under federal law signed by Biden, Trump issued an executive order extending ByteDance's sale window for four separate occasions. These interventions allowed TikTok to remain operational while the company sought a buyer. The state Department of Justice previously defended the ban as necessary to prevent spying by foreign adversaries and noted that President Trump’s business experience facilitated finding an American partner, which Knudsen credited for ending taxpayer waste on litigation. Despite the ban's dismissal, cybersecurity experts question whether the partial divestment fully addresses data security risks. Timothy Edgar, a cybersecurity expert from Brown University and Harvard Law School, filed an amicus brief arguing that focusing solely on ownership percentages may create a false sense of security. Edgar contends that significant pressure was needed during the end of Trump’s first term and early Biden presidency to negotiate robust data safeguarding agreements with the Committee on Foreign Investment in the United States. Edgar warned that the current arrangement might result in less oversight of TikTok's data practices and noted that there are numerous other potential vulnerabilities for personal data beyond the TikTok platform itself, suggesting supporters may have focused on the wrong metric regarding national security threats.