Creator Contract Liability When Your Platform Disappears: The TikTok Ban

As TikTok’s future in the US hangs in the balance, influencers and brands are left wondering how a potential ban could impact their posting contracts. In this episode of The Briefing, Scott Hervey and Jamie Lincenberg dive into the potential legal challenges and share insights on how brands can stay ahead of the curve in this ever-changing landscape.

Watch this episode on the Weintraub YouTube channel.

Show Notes:

Scott:

On January 19, 2025, TikTok went dark, forced to cease operations in the US as a result of a federal law that bans the app in the US unless TikTok divest itself from its Chinese parent company. Now, as we record this podcast today on the 21st, TikTok is back up. It has a 75-day stay granted by current President Trump. While TikTok sorts out whether it’s going to sell itself or some other deal structure that will allow it to continue to operate in the US. For influencers that use TikTok as a content platform, many are concerned, very concerned that this federal law ban will have a serious impact on their livelihood. But here’s something that I haven’t heard much chatter about. What happens to those brand integration contracts where an influencer is required to post content to TikTok after the ban date? Does this Does this mean that an influencer is in breach? Can the influencer be liable to a brand for failure to perform, even though it’s really out of the control of the influencer? I’m Scott Hervia, a partner with the law firm of Weintraub, Tobin, and I’m joined today by my colleague, Jamie Lindsberg, to talk about whether influencers face potential liability due to the TikTok ban on this installment of the briefing.

Jamie, welcome back to The Briefing.

Jamie:
Thanks for having me again, Scott.

Scott:
This is an interesting topic, and I got to say, from the time that I put our outline together till today when we’re recording this podcast, it really has been about three days, and so much has changed in those three days. But as we’re recording this, we’re recording this on the 21st, yesterday, the 20th, President Trump granted TikTok a 75-day stay for the band to take effect, pending some deal to work out the issues related to this federal law that would ban TikTok’s operations and also would ban any company from hosting or allowing TikTok app to be made available to users in the United States. Let’s first talk about the TikTok ban or sale law. This law was passed in April 2024 as part of a broader For an aid package. It gives ByteDance, TikTok’s Chinese parent company, approximately 9 to 12 months to sell TikTok’s US operations to an American buyer. If ByteDance fails to divest TikTok within the time frame, which we know happened, the app would be banned from US app stores and web hosting services. In between April 2024 and January 19, 2025, which is the band date, there were lawsuits filed by TikTok, lawsuits filed by the FTC and the DOJ, appeals to federal courts, including the Supreme Court, which upheld the ban.

As I said, while I was working on our outline for the episode, the Wall Street Journal reported that President-elect Trump said that he would issue in order to reopen TikTok on Monday, January 20th, 2025. As we know, on Monday, President Trump gave TikTok a 75-day stay of the ban.

Jamie:
Yeah, that’s right, Scott. A lot’s happened in the last couple of days around this, but we have been anticipating the effects of this for quite some time now. The history of TikTok’s bumpy relationship with the US prior to April of 2024 is important to understand. In 2020, the Trump administration had expressed some concerns about TikTok’s Chinese ownership and privacy and security issues, and the administration had threatened to force a sale or a ban through executive orders. You may recall that Trump had even pushed for an acquisition Microsoft. But after that fell through, Oracle entered into a commercial agreement with TikTok for the purpose of protecting US data.

Scott:
Right. But even after that, and through 2023, various states passed laws banning the use of TikTok on government devices. And in the end, 39 states have banned TikTok on government devices. Also, important to note, the federal government bans TikTok on devices owned by the federal government, and certain universities have banned the use of TikTok on campus WiFi and university-owned computers. And in 2023, there was increased bipartisan pressure and congressional hearings about TikTok’s data practices and potential national security concerns.

Jamie:
The timeline that you’ve just mentioned creates legal implications for influencer contracts. We can essentially divide those contracts into three distinct time periods, each with its own legal implications. First contract signed before 2020, when TikTok faced its first serious regulatory scrutiny under the Trump administration. Second, contract signed between 2020 and early 2024 during that period of increasing regulatory pressure. Third, following enactment of the law in April 2024.

Scott:
Let’s explain why this timeline is important in looking at potential influence or liability under a brand agreement that requires posting of integrations on TikTok after the ban. We’re looking at a potential defense to this liability. The first is under a legal doctrine called the doctrine of impossibility, and the other is under the application of any force majeure provision that might be in the agreement. Let’s talk about the doctrine of impossibility first. Under the doctrine of impossibility, a party may be excused from performing a contract if a supervening event prevents compliance with the agreement. In California, the doctrine requires the party a hurting the defense of impossibility to establish the following: one, that the supervening event, in this case, the TikTok ban, makes performance impossible or impractical. Two, the non-occurrence of the event, meaning that the US government’s shutdown of TikTok, was a basic assumption upon which the contract was based. Essentially, was the supervening event foreseeable at the time the contract was entered into. Three, the occurrence of the supervening event resulted without the fault of the party seeking to be excused. Four, the party seeking to be excused did not assume the risk of the occurrence of that event.

And five, the parties have not agreed, either expressly or impliedly, to perform in spite of the impossibility or impractability that would otherwise justify on performance.

Jamie:
It sounds like the doctrine of impossibility could provide a defense to a breach claim depending on when the contract was actually entered into. If there are agreements where performance is still required that were entered into prior to 2020, when TikTok first faced US scrutiny, then the impossibility defense would be strongest as a full platform ban wasn’t widely contemplated at that point.

Scott:
I agree with you. For any agreement signed after 2020, but before April 2024, I think it’s a mixed bag as some level of platform risk was foreseeable. However, I can also see an argument that TikTok’s deal with Oracle mitigated the potential of any platform ban. Prior to the enactment of the ban or sale law in April 2024, I can see a real strong argument that That impossibility, the doctrine of impossibility would provide a good defense.

Jamie:
Right. And I think in practice, the concern really has only come up and been a point of conversation over the last maybe 6 to 12 months. So the agreement The arguments that may face bigger problems applying the impossibility defense would be those entered into after April of 2024. At that point, the risk of a potential platform ban was known, and any influencer who entered into an agreement requiring posting on TikTok after the ban date likely did take on the burden of performing despite that risk of impossibility.

Scott:
Yeah, I can see that. But there is an argument to the contrary because the legislation did provide the possibility of a sale and not just a ban. So as such, courts might view this differently than a straightforward impossibility case. So the question then becomes, Is it the ban that’s foreseeable or the possibility of continued operation under new ownership? Which one is more foreseeable than the other? Or how foreseeable would be the ban over continued operation under new ownership?

Jamie:
It’s a good point, Scott. Now let’s talk force-major clauses. These provisions typically excuse performance when circumstances beyond a party’s control make performance impossible. A force major provision lists certain events that could constitute a force major event, and the occurrence of which would excuse performance. But here’s where it gets interesting with the TikTok situation. We We do sometimes see a force major clause lists government actions or changes in law as a force major event that may excuse performance. But what about a clause that doesn’t mention government actions or changes in laws, but only focuses on acts of God or natural disasters such as earthquakes or floods or hurricanes, war, terrorism, civil unrest? A clause that broadly mentions government actions, while one limited to So these traditional force majour events like natural disasters, really wouldn’t.

Scott:
Right. I agree with you. I remember after COVID, we started seeing a pandemic listed as one of these force majeure events. But I will say most force majeure provisions I see say that a force majeure event is one that prevents performance where such failure is caused by events beyond that party’s reasonable control.

Jamie:
So let’s We’ll talk practical implications and contract drafting. First, based on the evolving social media landscape and recent platform uncertainties, it seems that a force majeure provision should always be included in influencer contracts, and these force majeure provisions should probably specifically mention platform-specific risks.

Scott:
I agree. Such a provision would remove any ambiguity about whether platform issues qualify as force majeure events. But let me ask you a question. Is just saying that platform unavailability or the unavailability of relevant platform features or functions, listing those as a force majeure event, is that enough? Might it also be a good idea to include specific language addressing what happens in the event of a platform issue?

Jamie:
Definitely. In a perfect world, it would be great to lay out alternative performance language in the event of a platform issue. But that language would then have to address a multitude of potential platform issues. Remember, Scott, these agreements are negotiated very quickly. As a practical matter, there sometimes just isn’t enough time to ponder all of the different potential platform issues and to negotiate alternative performance options. In all likelihood, a provision requiring the parties to negotiate in good faith regarding to the deliverables and alternative performance in the event of a platform issue is more practical.

Scott:
I’m sure also if you’re on the brand side, the brand would also argue that a partial refund is also just as practical and should also be in the mix as part of this renegotiation. I’m sure that compensation adjustments due to metric requirements would be on the table as well.

Jamie:
Right. I can see a brand making that argument, and depending on how much the influencer has performed up to the date of the force majeure event would determine the partial refund or partial compensation.

Scott:
It is true that these type of agreements move very fast. However, I think this situation highlights the importance of careful contract drafting in the dynamic social media landscape. The best protection isn’t just relying on the doctrine of impossibility or a force majeure provision, regardless of how well it’s drafted. I think it’s also anticipating and planning for platform uncertainty. Jamie, what do you guys normally do?

Jamie:Typically, we do include a force majeure provision, which addresses a situation beyond either party’s control. Sometimes it is solely brands control. But of course, when working with the influencers, we want that to be a mutual right which is another factor that plays into all of this to suspend or terminate for a force majore. But typically, we do see a force majeure provision, and the influencer is paid out for services that have been rendered up to the time that the force majeure event interrupted performance of the contract.

Scott:
Jamie, let’s talk about what you have seen in the last six months, where I guess it It became clear that TikTok was not going to sell and that the ban may well have taken effect. So what have you been seeing with regard to force majeure provisions, provisions for alternative performance, et cetera?

Jamie:
We have been seeing these provisions negotiated out more in the last 6-12 months. I would say if the agreement contemplates a TikTok deliverable, then in the event that TikTok is unavailable at the time of the agreed posting date, the parties will either mutually agree on an alternative platform for the influencer to post the updated deliverable on, or they will set out pre-negotiated alternatives.

Scott:
How flexible have brands been on on negotiating the terms of the force majeure provision?

Jamie:
Fairly flexible. I mean, it’s an issue that affects both sides. We do see the brands wanting to work with the influencers in the event that something like this were to happen. I would say that it’s generally a pretty amicable discussion or negotiation over the terms.

Scott:
Compensation Compensation to the influencer in the event of a force majeure provision or compensation to any artist that performs services in the event of a force majeure provision, that’s always going to be a sticky issue and a heavily negotiated point. I know that usually artists want to be paid in full, and brands want the benefit of the bargain, and they want the benefit of what they’ve contracted for, which usually is not just half-delivered content, but the delivered content posted and the metrics proving that they got the ROI. What have you been seeing with regards to if you have at all, been seeing negotiated changes or negotiated modifications to influence or compensation in the event of a force majeure event?

Jamie:
It is a sticky situation. We We typically see that the influencer will be paid out a pro-rata portion of their compensation, depending on services that have been rendered up to and including the effective date of termination for such force, major event. I will say that a lot of times that doesn’t address maybe the usage rights that the brand has also had during that period of time. So We like to incorporate that as well. It’s all a discussion. A lot of times it’s a discussion between the parties at such time because it’s really very difficult to come up with a number of what that would be ahead of time.

Scott:
Would you say that this potential ban has been a lot more challenging for influencers that are primarily focused on their TikTok presence as opposed to influencers that are across multiple platforms?

Jamie:
Platforms? Of course, absolutely. There are many influencers. Tiktok is their top performing platform, and it would definitely have much more of an effect on those influencers than those who have diversified their platforms.

Scott:
I know that’s one thing that we always talk to our clients about is diversifying the platforms on which they rely for their and how they reach their audience. Here’s a lesson why you should listen.

Jamie:
It’s a different type of content creation. They’re short form videos versus on Instagram, it’s a different ball game. Yeah, so the effects are widespread and important.

Scott:
Right. Well, Jamie, thanks for taking the time to talk to us today here. I do want to point out that this is probably going to be Jamie’s today’s last podcast because she, sadly, is leaving our firm. She’s not going to another firm. Otherwise, we would wipe all presence of her off of our podcast. No, I’m joking. But she’s going in-house at a company to be working right in this creator economy space. I think we’ll probably continue to see her in a different capacity in the future. Hopefully, she’ll become an avid listener and maybe commenter on some of our podcast episodes. But it’s always been great having you. You’ve provided really great insight. You’re a really great co-host, and we’re going to miss having you.

Jamie:
Thanks, Scott. This has been really fun. If you ever want me on again as a special outside guest, I’m happy to join you.

Scott:
Oh, that’s a great idea. That’s a great idea. Maybe we just might do that. We just might do that. Once again, Jamie, thanks for joining us today. Thanks. Well, that’s all for today’s episode of The Briefing. Thanks to Jamie for joining me today. Thank you, the listener or viewer, for tuning in. We hope that you found this episode informative and enjoyable. If you did, please remember to subscribe. Leave us a review and share this episode with your friends and colleagues. If you have any questions about the topics we cover today, please leave us a comment.