TikTok is facing significant legal challenges in the European Union, including a proposed fine of €500 million. The company has been accused of transmitting user data from European users back to China. This development emerges amid growing concerns in the United States about TikTok’s national security implications, specifically regarding data privacy and potential access by the Chinese government.

In response to these concerns, former President Trump has proposed a potential solution to avoid a total ban on TikTok through a project dubbed “TikTok America.”

The potential fine in the EU is being issued by Ireland’s Data Protection Commission. This follows a complaint made by the Austrian advocacy group, Noyb, which alleged that TikTok, among other companies, was unlawfully transferring user data from the EU to China. While TikTok has the option to appeal this fine in Irish courts, the company has yet to make a public comment regarding the situation or its strategy moving forward.

In recent years, the European Union has actively penalized companies for privacy violations, with TikTok’s situation representing one of the largest fines under the General Data Protection Regulation (GDPR). Other notable fines include €1.2 billion against Meta and €746 million against Amazon. In the United States, the looming ban is based on fears that ByteDance, TikTok’s Chinese parent company, could allow the Chinese government access to sensitive data gathered from American users.

While China has denied that it exerts pressure on companies to collect such data, the concerns persist. To address these fears, the Trump administration has been working to facilitate a sale of TikTok’s U.S. operations, hinting at the formation of a new entity called TikTok America. Under this proposal, U.S. investors would own half of the company, while ByteDance would retain a portion of ownership.

Although the government set a deadline for finalizing this deal on April 5th, with the date fast approaching and no updates, an extension may be forthcoming.