TikTok’s fate in the US has never been in doubt since the House of Representatives last weekend approved a bill that gave its parent company two options: sell it to an approved buyer or see it banned.
Experts say the bill will now pass the Senate, and President Joe Biden has indicated he will sign it.
But the ban on TikTok could take years to take effect, as its Chinese parent company ByteDance could challenge the law in court.
And even if he survives the legal challenge, no one is quite sure what will happen next.
How soon could the potential ban take effect?
It will probably be a few years from now.
According to the language of the statute, once the bill is signed, ByteDance will have nine months to find an American buyer for TikTok.
In addition, the president can extend the deadline an additional 90 days.
This means that without a sale, the earliest TikTok could shut down in the US would be a year from now.
But it’s more complicated than that.
If ByteDance sues to block enforcement of the law — which it has said it will — the bill will be upheld by the D.C. Circuit Court of Appeals, according to Isaac Boltanski, director of policy at financial services firm BTIG.
Boltanski said ByteDance will file a lawsuit no later than this fall. And while the case is under judicial review, he said the “clock” on any ban has effectively stopped.
Once the D.C. court issues its decision, whichever party loses will likely seek a review by the US Supreme Court.
That would put another year off the ban, meaning nothing would go into effect until 2026, Boltansky said.
TikTok will argue that the ban is unconstitutional and that steps are being taken to protect the data of American users. The app has already launched an aggressive lobbying campaign involving a number of small business owners and influencers who say it’s their lifeblood.
“We have to make enough noise so they don’t cut us off,” said @dadlifejason, a TikTok user with 13.8 million followers. TikTok ad shared on the social network.
How about finding a buyer?
The bill would allow TikTok to continue operating in the US if ByteDance sells the app to a US-approved firm.
While big U.S. tech companies are eager to get their hands on the platform, Boltanski said Biden administration regulators — not to mention GOP critics of Big Tech firms — aren’t interested in expanding the power, reach or influence of such companies.
Some other outliers may emerge. At least one, led by Trump administration Treasury Secretary Steve Mnuchin, has already tried to make an offer. He told CNBC in March that he was forming an investor group. There is also The Wall Street Journal informed Former Activision Blizzard CEO Bobby Kotick was looking for potential acquisition partners. While ByteDance, which owns other companies, is worth hundreds of billions of dollars, experts say TikTok will make less than that — especially if it is sold without a strong recommendation algorithm.
But Boltanski believes ByteDance is unlikely to agree to any sale. The Chinese government has said as much, claiming that it regards the algorithm as a national security asset. And without it, TikTok becomes less attractive to potential buyers.
So is TikTok going away in the US?
Maybe – but the ultimate impact may be limited. The fact is that most TikTok users are already on other platforms, so to the extent that they run their business on TikTok, the impact on their livelihood may be limited.
According to a survey by financial services group Wedbush, about 60% of TikTok users said they would simply move to Instagram (or Facebook) in the event of a sale, while 19% said they would go to YouTube.
Analysts at Bernstein Financial Services came to similar estimates. In a note to clients, they predicted that Meta, which owns Instagram and Facebook, would receive 60% of TikTok’s U.S. ad revenue and YouTube’s 25%. Snapchat will also benefit, they said.
Why did the legislators need to take this drastic step?
According to Boltanski, many political experts are surprised that the bill crossed the finish line. But both Chinese influence and a wave of concern about social media’s impact on young people combined to push it through.
“It’s been remarkable,” Boltanski said. “Everyone is forced to do nothing or minimize things to keep DC’s lights on.”
As tensions rise with Beijing, congressional lawmakers, along with top law enforcement officials, have warned that TikTok is controlled by the Chinese Communist Party (CCP) and poses a national security threat to the United States.
“This screams of national security concerns,” FBI Director Christopher Wray testified on Capitol Hill last year.
US officials fear the Chinese government is using TikTok to access and spy on American users, spreading disinformation and conspiracy theories.
It felt like the TikTok ban was moving slowly, then quickly. What’s going on?
House independent TikTok passed the bill In a major bipartisan vote in March. The Senate was slow to act as Commerce Chair Maria Cantwell, D-Wash., drafted her own bill.
That all changed when Speaker Mike Johnson, R-La., working with the White House, unveiled a $95 billion foreign aid plan last week that included billions for Ukraine, Israel and Taiwan.
This extensive relief package includes: The House’s TikTok bill, with some minor changes. Johnson moved the package through his chamber, then adjourned the House, forcing the Senate to take it or leave it.
Instead of further delaying critical, long-standing military and humanitarian aid, the Democratic-controlled Senate is seeking to quickly pass the package, including the TikTok bill, and Johnson’s other priorities.