This article contains an update.
Update, May 1, 2025
After publication, Matt Schettenhelm from Bloomberg Intelligence informed the author that a different public company, Akamai, had made a disclosure about the TikTok ban in its SEC filings.
Akamai is a content delivery network (CDN) provider, and confirming CDN usage is harder than directly loading a website or making an app publicly available in an app store. Akamai’s February 24, 2025, Form 10-K disclosed “legislation that prohibited the provision of certain types of services to a Chinese application” and stated that, “The Attorney General has since determined that our provision of services to this customer has not violated the law and that we can continue providing services as contemplated by the Executive Order without violating the law and without incurring any legal liability.” This is most likely in reference to the Protecting Americans from Foreign Adversary Controlled Applications Act and TikTok.
Akamai’s 10-K was not filed until February 24, 2025, which came after Akamai’s February 20, 2025, quarterly fillings and earnings call for the fourth quarter of 2024. During that call, the company made repeated reference to the “uncertainty around our largest customer” and said “there is no ban in the U.S. for our largest customer.” While Akamai never names TikTok as this customer, a question from an analyst does name TikTok as the customer (45:13 into the call), and the company does not dispute the customer in its response. This resulted in news stories about TikTok being an Akamai customer. It should be noted, however, that this is not technically confirmed in Akamai’s official filings.
Broadly, Akamai’s disclosure demonstrates that public companies can choose to disclose the choices that they have made to not comply with the TikTok ban, as well as attempt to describe the situation and its potential impact to investors. Other public companies should follow Akamai’s example. The disclosure is quoted in full below for reference.
The full text from Akamai’s February 24, 2025, 10-K is as follows:
In addition, in April 2024, the U.S. government passed legislation that prohibited the provision of certain types of services to a Chinese application if the application was not sold to a neutral third party by January 19, 2025. The Chinese application was not sold to a neutral third party by the January 19th deadline, but President Trump subsequently signed an executive order instructing the U.S. Attorney General to not take any action to enforce the passed legislation for a period of 75 days from January 20, 2025. The Attorney General has since determined that our provision of services to this customer has not violated the law and that we can continue providing services as contemplated by the Executive Order without violating the law and without incurring any legal liability. It is difficult to predict whether the passed legislation will ultimately be enforced and whether any future judicial challenges brought against the executive order will be successful. Even though President Trump has extended the enforcement deadline for a ban on the Chinese application, there is no assurance that we will not be exposed to liability and we may be exposed to significant fines, litigation, indemnification claims, negative publicity, reputational harm, diversion of management attention, interruptions in our operations, financial loss and other similar harms by continuing to provide services to the Chinese application.
Since January 19, 2025, U.S. companies have been barred from hosting TikTok or distributing its mobile app, lest they face crippling fines that could total trillions of dollars. On the day the TikTok ban went into effect—the day before President Donald Trump’s second inauguration—Trump posted on social media that he would not enforce the ban. TikTok and other affected companies had already begun to comply with the law, but once the president-elect gave companies the greenlight to defy the ban, Oracle allowed TikTok to restore itself immediately, while Apple and Alphabet/Google waited to restore the app until February 13.
Trump does not have clear authority to delay compliance with the ban
On January 20, his first day in office, and despite presenting no public evidence of any efforts by TikTok to divest to comply with the law, President Trump issued an executive order (EO) suspending enforcement of the law for 75 days, until April 6. As that new deadline approached, he issued another EO, purportedly extending the nonenforcement period for another 75 days. At the time, there were press reports that TikTok was close to a deal to comply with the law, which was reportedly scuttled by Chinese government officials after Trump’s “liberation day” tariffs.
The president does not have clear statutory authority to grant extension from compliance with the law. Legal experts and members of Congress have cautioned that despite President Trump’s actions, companies could nevertheless face liability for violations. Despite these risks, at least three publicly traded U.S. companies—Oracle, Apple, and Alphabet/Google—are continuing to host or distribute TikTok.
Put simply, Congress passed and the Supreme Court upheld a law with a deadline. The deadline then passed. The president has twice claimed the power to extend the deadline, even though he does not clearly have authority to do so. Now, these public companies are seemingly relying on the president’s declarations and on nonpublic letters from the attorney general to justify not complying with the ban. Yet given the enormous penalties for violations that were written into the law, what risks do these companies, and their investors, now face?
Public companies should disclose noncompliance risks to their investors
Investors in these companies likely have no idea about the tremendous fines the companies are risking by continuing to host or distribute an app that has been banned. The Center for American Progress has been unable to find any public comments from Apple or Alphabet/Google on restoring TikTok to their app stores despite the law, they have allegedly not responded to a reporter who asked about it, and no Securities and Exchange Commission (SEC) filings acknowledged the potential legal threat or risk from the TikTok ban once it went into effect—though TikTok issued a short statement announcing its return to the app stores. Instead, it is only clear when someone in the United States visits TikTok.com or downloads TikTok from the app stores that the site is still active in the country and these companies are potentially continuing to incur massive new liabilities for violating the ban.
Apple and Google did not return TikTok to their app stores until February 13, 2025, after their first earnings reports of the 2025 calendar year. The delayed enforcement of the TikTok ban was initially supposed to last 75 days and end on April 6, meaning the issue would have been resolved before the next set of quarterly filings and earnings calls for public companies. However, President Trump’s April 4 EO extended the delay another 75 days, until June 19, meaning it will now be in effect during the next round of quarterly filings and earnings calls.
So the question is whether, with their quarterly earnings fast approaching—along with required SEC filings and earnings calls scheduled—any of these public companies will disclose the risks associated with their potential violations of the PAFACA.
Ideally, the public companies should disclose, in their quarterly filings to the SEC, the risk of massive fines for violating the TikTok ban.
Ideally, the public companies should disclose, in their quarterly filings to the SEC, the risk of massive fines for violating the TikTok ban. If they don’t, investors and analysts should at least inquire during earning calls about how the companies are assessing the risk of potentially violating the law, especially when they are risking fines that could wipe out even the tremendous amounts of money these companies generate. At a minimum, these companies should release the nonpublic letters of nonenforcement from the attorney general so that investors, Congress, and the public can see these promises for themselves.
SEC rules generally require public companies to disclose when they are facing significant legal liabilities or are involved in significant litigation or government investigations. Only Oracle previously identified the TikTok ban as a risk, in its May 2024 Form 10-K—which makes sense, as Oracle is TikTok’s only U.S. cloud hosting partner under TikTok’s Project Texas. However, Oracle received no questions about its noncompliance during the question-and-answer portion of its third-quarter 2025 earnings call on March 10, 2025 (the only call after the ban went into effect). Alphabet, the parent company of Google, released its first-quarter 2025 earnings on April 24, 2025, and made no disclosures related to the TikTok ban in its earnings release or SEC 10-Q filing; there were also no references or questions during its earnings call. Apple has announced its earnings call for May 1, 2025. Oracle has not yet scheduled its next quarterly results release, though traditionally it occurs in mid–June.
However, the need to report likely hinges on a combination of how material the legal risk is and the probability that it will occur. The companies’ lawyers seemingly recognize some material legal risk, as they reportedly rejected the first letter from the U.S. Department of Justice as being legally inadequate because it wasn’t directly from the attorney general. Yet investors and the public have no way to gauge that legal risk, as the letters promising nonenforcement from the attorney general have not been made public. Additionally, one imagines there are legal concerns with admitting to ignoring a ban that has been upheld by the Supreme Court, even at the president’s request, on a legal filing with a U.S. government agency. Although the risk of litigation from the government is material—potentially costing these firms hundreds of billions of dollars—the probability of the government enforcing the ban against these firms seems very low at the moment, given the president’s position thus far.
That probability, however, could change quickly, as demonstrated by the president’s seemingly haphazard pronouncements and shifting views across a range of topics. President Trump is known for abruptly changing his mind on major positions, including on banning TikTok. Moreover, a shift the president’s position could possibly transpire based on some factor completely unrelated to these companies or the TikTok ban.
While the upside of complying with President Trump’s request seems clear for Oracle, as it is the primary U.S. vendor for TikTok and a leading contender to take over the company in any divestiture, Apple and Alphabet/Google are taking on potentially tremendous risks for an application that is just one among millions in their app stores. Compounding their risk is the fact that both companies have often been the targets of significant attacks from President Trump, who has recently marshaled the federal government to launch unprecedented attacks to punish perceived enemies.
Apple and Alphabet/Google have not stated their motivation for not complying with the TikTok ban; it is possible that they are choosing to not comply in order to curry favor with President Trump. Both Apple and Alphabet/Google are currently being prosecuted by the federal government in numerous cases, and the federal government is also weighing tariffs and exemptions that could cripple the production and sales of their products.
Conclusion
With their quarterly reports due and earnings calls happening in the coming months, all three of these public companies will face legal risk regardless of whether they disclose their willing violation of the TikTok ban to investors. Unfortunately for them, while the attorney general enforces the PAFACA, shareholders can file securities fraud litigation. With potential fines this large and the legally uncertain landscape, it is hard to imagine that the actions—or inactions—of these companies could not eventually lead to a lawsuit (though not necessarily a successful lawsuit) given the current legal environment around securities fraud litigation.
The public companies discussed above find themselves in a legally unclear position. Importantly, they are in this position because they chose to follow President Trump’s encouragement not to comply with the ban. Therefore, there is little sympathy for the potential legal complications they may face for their decision.
The question of whether public companies are required to disclose their noncompliance with a law under presidential encouragement is smaller than the issue of a president refusing to enforce the ban, encouraging companies to set it aside, or assuring companies he will not punish them for violating it. The rule of law is made up not just of large pieces but of small ones too, all of which must work in concert for it to exist. Maybe someday the courts will rule on this issue. In the meantime, investors can only wait to see how these public companies choose to describe their risks in upcoming SEC filings and earnings calls or hope the letters of nonenforcement from the attorney general see the light of day soon.
The author would like to thank Alex Thorton, Nicole Alvarez, and Sam Hananel for their help.