Concerns are rising over TikTok’s potential ban in the U.S. due to national security issues linked to its Chinese parent company, ByteDance. Users face a deadline to either sever ties with ByteDance or halt operations. The Supreme Court has confirmed the ban, with President Biden unlikely to intervene. Competitors like Meta and Snap are seeing stock increases, while TikTok’s CEO may attend Trump’s inauguration, hinting at possible political resolutions. Interest in acquiring TikTok is also growing.
Impending TikTok Ban Raises Concerns for Users and Partners
Last Friday, a significant announcement was made regarding TikTok’s accessibility in the United States. Starting Sunday, the popular app will no longer be available unless President Joe Biden’s administration assures tech giants like Apple and Google that they won’t encounter any punitive actions when the ban is enforced.
This impending ban stems from legislation signed by President Biden in April, marking an unprecedented closure of a major social media platform in the U.S. TikTok boasts around 170 million users nationwide and is projected to generate approximately $20 billion in revenue by 2025.
Deadline Approaches for TikTok’s Parent Company
The platform has until Sunday to either cut its ties with its Chinese parent company, ByteDance, or cease its operations in the U.S. This move is intended to mitigate concerns regarding potential national security threats associated with the app.
On Friday, the Supreme Court justices confirmed the ban unanimously, and a statement from the White House indicated that President Biden is unlikely to intervene to preserve TikTok before the deadline. Should he fail to formally implement a 90-day delay, companies that support TikTok or host the app may face legal ramifications.
The uncertainty surrounding TikTok’s fate has prompted many users, particularly younger demographics, to explore alternative platforms like RedNote, which is also based in China. Meanwhile, competitors Meta and Snap have experienced a spike in their stock prices this month as investors anticipate a surge of users and advertising revenue after TikTok’s potential exit.
Marketing firms relying on TikTok have scrambled to devise contingency plans this week, with one executive labeling the situation a ‘flashpoint’ moment. This follows months of the prevailing belief that a resolution would be found to keep the app operational.
There are indications that TikTok could potentially make a resurgence under the new administration of Donald Trump, who is advocating for a ‘political resolution’ to the ban. Last month, he urged the Supreme Court to pause the ban’s implementation.
Trump asserted on Friday that the decision regarding TikTok’s future rests in his hands, although he did not elaborate on the steps he intends to take. Reports suggest he may consider an executive order to delay the enforcement of the law banning TikTok for 60 to 90 days.
Shou Zi Chew, TikTok’s CEO, is set to attend Trump’s inauguration ceremony on January 20, where he will be among the distinguished guests, as reported by a source to Reuters.
Interest in TikTok is growing, with potential bidders such as former Los Angeles Dodgers owner Frank McCourt eyeing the expanding enterprise, which analysts value at up to $50 billion. Media outlets have also speculated that Beijing may be contemplating selling TikTok’s U.S. operations to billionaire and Trump ally Elon Musk, though the company has denied these claims.
ByteDance, the parent company of TikTok, is a private entity with 60% ownership held by institutional investors like BlackRock and General Atlantic, while its founders and employees hold the remaining 40%. The company employs over 7,000 individuals in the United States.