The Vote  

The unanimous Energy and Commerce Committee vote (50-0) in favour of forcing TikTok’s parent company ByteDance to divest itself or sell the app could see 170 million American users no longer able to use TikTok. There is now a wait to see whether the US Senate approves the measure before it becomes law. The stated purpose of the bill (as it stands) is to “protect the national security of the United States from the threat posed by foreign adversary controlled applications.” 

Chinese Links 

The worries that ByteDance’s links to the Chinese state make TikTok’s usage in the US a threat to national security date back to the Trump presidency. Back in 2020, (then) President Donald Trump tried to ban the app but was blocked by the courts. It was part of a wider trade and political war with China which is still carrying on. Other apps with links to China banned by Trump in 2021, for example, included the Ant Group’s Alipay mobile payment app, QQ Wallet, WeChat Pay, CamScanner, SHAREit, Tencent QQ, VMate (published by Alibaba Group subsidiary UCWeb), and Beijing Kingsoft Office Software’s WPS Office. 

Bans In Many Countries 

The ban on TikTok was extended to number of other institutions and countries including: 

– The European Commission, the UK government (and the BBC), the US government banned the TikTok app from staff devices, to protect sensitive personal data, increase cybersecurity, protect against misinformation, and to protect national security. 

– In June 2020, India banned TikTok and around 300 other Chinese apps from government devices. 

– In 2023, the TikTok app was banned from government devices in Australia and Canada. 

– Other countries with a government device TikTok ban also include Taiwan, Ireland, Denmark, and Belgium. 

Many may also remember how, in March last year, the CEO of TikTok, Shou Chew, had to appear before the House Energy and Commerce Committee in the US to discuss concerns about TikTok’s consumer privacy, data security practices, its impact on children, and the app’s alleged links to China. 

This Time 

This time, however, rather than facing just a government device ban, TikTok is facing a whole country ban. Worse than that, it’s the country with TikTok’s largest audience, with estimates ranging around 113.3 million to 116.5 million users. 

The stark choice facing ByteDance is to now either sell the TikTok app within 6 months (thereby severing alleged links with the Chinese state) or face removal from mobile app stores in the US, effectively wiping out its biggest audience, threatening the app itself. 

What Would A Ban Mean? 

Looking at the broader picture, Banning TikTok in the US completely could have a significant impact on several fronts, given the app’s massive user base and economic influence in the country. Some of the potential effects could include : 

– Massive user impact (businesses and home users). With millions of active users in the US, a ban would abruptly cut off access for a large community of creators and viewers. It would affect the way people consume and create short-form video content, potentially shifting these users to alternative platforms. 

– A blow to the creator economy. Many US-based content creators rely on TikTok for income through brand partnerships, sponsored content, and the app’s creator fund. A ban could disrupt this economy, affecting the livelihood of thousands of influencers and content creators. 

– A significant effect on market competition and innovation. For example, TikTok’s absence could create a vacuum in the social media landscape, encouraging competitors like Instagram Reels, YouTube Shorts, and Snapchat to fill the gap. This could lead to innovations within these platforms as they vie for the TikTok audience. 

– Trouble for advertisers (brands). Brands that leverage TikTok for marketing and customer engagement would need to pivot their strategies to other channels. This could reshape digital marketing trends and impact the effectiveness of social media campaigns. 

– More regulations. Heightened awareness and concerns over data privacy and security issues related to social media, could lead to more stringent regulations and policies affecting all platforms, not just TikTok. 

– Effects on international relations. Given the geopolitical tensions underlying concerns about TikTok’s Chinese ownership, a ban could have diplomatic repercussions, influencing US-China relations (making them even worse) and possibly affecting American companies operating in China. Some commentators have already suggested we are witnessing a kind of ‘cold war’ with China now anyway, with the US restricting things like microchips and other components in a bid to perhaps stifle the growth of what it sees as a more powerful and growing economy. 

– Legal and political ramifications. Implementing a ban would likely involve legal challenges and a complex regulatory process. It could set a precedent for how the U.S. government addresses concerns about foreign-owned technology companies in the future. 

All in all, therefore, the impact of a TikTok ban in the US would extend well beyond the app itself, affecting the social media ecosystem, the digital economy, and even international relations. However, the specific outcomes would depend on a variety of factors, including how such a ban is implemented and the response from users, creators, businesses, and other stakeholders. 

User Revolt Reported In The US 

Not surprisingly, there have been reports in the US of congressmen being inundated with calls from TikTok users objecting to a ban. It’s also been reported that TikTok encouraged its users to call their representative to vote against the measure. 

Criticisms 

The vote and proposed ban have led to other criticisms, including that from The American Civil Liberties Union (ACLU) which pointed to the app’s value to many Americans for information and communication, and describing the ban as a “cheap” political point scoring measure in an election year. 

What Does TikTok Say? 

TikTok has said (on the ‘X’ platform) that it amounts to “an outright ban” and that “This legislation will trample the First Amendment rights of 170 million Americans and deprive 5 million small businesses of a platform they rely on to grow and create jobs”. 

What Does This Mean For Your Business? 

The potential total ban of TikTok in the US represents a pivotal moment not only for the app’s parent company (ByteDance) but also for a broad spectrum of stakeholders ranging from individual creators to large corporations. For ByteDance, the forced sale or severance of its largest international market could significantly impact its valuation, strategic direction, and global influence.

The loss of the US market (TikTok’s largest) would not only diminish its advertising revenue but could also deter potential investors and partners concerned about the platform’s stability and future growth prospects. 

For businesses and creators that rely on TikTok, the ramifications could be profound. The US, for example, is home to a significant creator economy where individuals and businesses leverage TikTok for brand building, audience engagement, and revenue generation. A ban would necessitate a strategic move to alternative platforms, which may not offer the same level of engagement or demographic reach as TikTok. This could disrupt marketing strategies, content distribution plans, and income streams for countless users. 

The competition within the social media landscape would most likely intensify in the wake of a TikTok ban. Rivals such as Instagram Reels, YouTube Shorts, and Snapchat stand to gain the most, absorbing TikTok’s displaced user base – the US may not be too unhappy about US-based company apps taking TikTok’s place. This shift could spark a wave of innovation as platforms vie to capture and retain these new audiences, potentially reshaping the social media ecosystem. 

From a broader economic perspective, a TikTok ban could have ripple effects beyond well the tech industry. The platform has become an integral part of digital marketing strategies for many businesses of all sizes. The disruption to these strategies could have downstream effects on sales, customer engagement, and brand loyalty across various sectors. 

Also, the ban could bring about stricter regulatory scrutiny over social media platforms, leading to increased compliance costs and operational challenges. This heightened regulatory environment could stifle innovation and deter investment in the tech sector, impacting the wider economy. 

The implications of a US-wide TikTok ban could, therefore, extend way beyond the app itself, affecting the livelihoods of creators, the strategies of businesses, the dynamics of social media competition, and the broader digital and national economies. Stakeholders will now, most likely, closely monitor developments and prepare should the worst happen. TikTok has held firm and denied any Chinese state links before. Nevertheless, the US is making a powerful statement with the unanimous vote and bill proposing a possible total ban which reflects the strength of resolve now in the US. It also reflects their willingness to pile-on the pressure in what is also a political battle with what they consider as a major rival.

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TikTok

Cloudflare has reported that back in 2020, the google.com domain was the undefeated leader in its ranking and was top from September to December, whereas TikTok.com was only ranked #7 or #8. TikTok first grabbed the top spot as the no.1 global destination in February 2021 (for a day), by August was leading the rankings on most days, and then from October onwards. TikTok now has more than one billion active users.

Why?

Some tech commentators have noted that the most likely reason for social video platform TikTok’s huge surge in popularity, which saw it become the first non-Facebook mobile app to Reach 3 billion downloads globally by July, was the search for entertainment during the pandemic lockdowns (Sensor Tower figures).

TikTok hosts a variety of short videos, covering different genres (e.g. comedy, dance, politics, and food) and some of the attributes and factors that have helped it to become so popular include:

– It is convenient and many people say it’s easier to edit and upload content in TikTok than in other competitor apps/platforms e.g., Instagram or Snapchat.

– It’s a visible space with a familiar format of funny, positive video clips for Gen Z, who spend a lot of time on their phones. TikTok’s short clips appeal to the younger generation’s shorter attention spans.

– It gives ‘ordinary’ people the tools to creatively express themselves and take part in current discourse.

– It provides a place for brands to experiment with their messages in entertaining ways, and a way for TikTok itself to discover popular new ways to expand its brand even more (e.g. the popularity of food and recipe video clips), leading to the proposed launch of ‘TikTok Kitchen’ in March next year.

– It has a content-rewarding algorithm that’s helped to drive meme culture, and TikTok’s algorithms can learn user preferences and customise the video feeds to their users, thereby helping it to keep users interested and engaged.

– It makes good use of music, which is particularly appealing to young age groups, and enables TikTok videos to be shared on Instagram, thereby boosting usage/download rates.

Troubles

Although TikTok is riding high in the popularity ratings it has suffered setbacks and criticism along the way, including:

– A temporary ban in India.

– Worries about links to the Chinese state and allegations that it may have discriminatory content censorship standards that are decided by the Chinese government.

– A US counter-intelligence investigation and an investigation by (Israeli) Check Point over possible backdoors and security vulnerabilities that the platform may have.

– Worries from child advocacy groups that the app may pose a risk to children.

– Criticism from Reddit CEO/co-founder Steve Huffman that TikTok, once installed, is like a kind of ‘spyware’ that’s always listening.

– A £4.3m fine after Musical.ly was found to have knowingly hosted content published by under-age users.

What Does This Mean For Your Business?

TikTok, the most popular app in the world, has clearly been boosted by the search for entertainment, comfort, and connection by a generation separated by the restrictions of the pandemic. It also, however, taps into (and appeals to) GenZ’s needs and gives them something that they value in terms of the ability to express themselves and have fun in a convenient way. For brands, it has provided insights, a testing ground, and a way to reach young audiences with news and creative message styles and for TikTok itself, while providing a great way to continuously learn about its audience to enable it to grow and stay appealing, as well as finding its own new opportunities. For TikTok’s competitors e.g., Snapchat, TikTok’s huge growth surge is proving to be a major threat.

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