From President Biden's swift signature on the sell-off bill to TikTok CEO Shou Xi Chew's fiery response, the battle for the TikTok app's future is on. With a deadline quickly approaching to either sell or face the chopping block, TikTok's fate hangs in the balance. So let’s take a look at what is going on with the ban, what the bill means, how this will affect different industries, and the current status of the app.
What’s going on with the ban?
On the morning of Wednesday, April 24, U.S. President Joe Biden signed the proposed TikTok sell-off bill into law, giving TikTok just 270 days to either sell the company to a new owner based in the U.S. or have the app banned in the nation entirely. The ban was proposed many began to worry the app may be used to share data about U.S. users with China's authoritarian government. TikTok CEO Shou Xi Chew was quick to respond, calling the new law “unconstitutional” and a ban on users voices in a video he posted to the platform. In a video he posted later that day, he explained “Rest assured, we aren’t going anywhere. We are confident and we will keep fighting for your rights in the courts. The facts and the constitution are on our side.” Now the new question remains about whether the Chinese-owned company will be able to win its battle in court and maintain its ownership.
What does this bill mean?
The sell-off bill means that TikTok now has just 270 days to sell the platform into U.S. ownership before it is removed from the nation entirely. If certain conditions are met, TikTok may be able to get an additional three months before the ban goes into effect. In order for the extension to occur, the platform will likely have to already be in the negotiating process. Regardless, this gives the app a little under a year before it needs to either sell or be banned in the U.S. There are some rumors that Meta may be interested in negotiating for ownership of the TikTok platform, but that is unlikely to be allowed. Based on the outcome of the app trying to be forced into U.S. ownership in 2020 by former President Donald Trump, the more likely buyer would be companies such as Oracle, an American computer software company.
How will this news affect different industries?
The TikTok ban does not only come as alarming news to users who frequently use the app, but many businesses, influencers, and content creators could also be heavily impacted. As with many popular social media platforms, many businesses have built strategies around TikTok to promote their name and products over the years. The loss of the app in the U.S. could be devastating to many smaller firms, influencers, and solo entrepreneurs who have been using the app to gain traction and reach younger audiences.
One Adobe Express study published in January found that 54% of business owners use TikTok to promote themselves and post an average of nine times each month. Additionally, the study found that one out of four small businesses use influencers on the platform for product sales or promotions, and a growing amount of users use the platform as a search engine. With the potential loss of TikTok in the U.S., these businesses may now have to look for other platforms and strategies to promote themselves.
Adriana Lacy Consulting
What is the current status of the TikTok ban?
Many business owners worry about being able to stay afloat after the legislation that could ban TikTok has been signed into law. Rumors spread that options were being explored to sell a majority stake in TikTok's U.S. business, but the day after the legislation was passed, TikTok's parent company ByteDance said that it would not sell its U.S. TikTok business. They continue to claim that they have not shared U.S. user data with the Chinese government and have no plans for selling the app. The deadline to sell the app is still set for January 19, 2025, but an extension may apply if ByteDance begins the sales process for the platform.
