Tortoise Daily Sensemaker: TikTok faces US ban

Fred Bassett's avatarPosted by
TikTok faces US ban
Barring a last-minute sale or unexpected Supreme Court reprieve, TikTok will be banned in the US on Sunday.

So what? Donald Trump wants to save the social media app, but that might be beyond him. The deadline for TikTok’s Chinese owner ByteDance to sell up is the day before his inauguration.

A TikTok ban in the US would have far-reaching effects on the 170 million Americans – roughly half of the population – who use it to watch everything from viral cucumber recipes to dance crazes, book recommendations, cosplay and bona fide news coverage; and the $250 billion creator economy, whose stars will lose their ability to make content if they’re in the country or a chunk of their audience if they’re not.

It would also be seen as a victory for Google and Meta, which stand to gain if creators try to take their audiences with them to YouTube and Instagram; Congress, which passed a bipartisan bill restricting the app in April; and Xiaohongshu, which means “little red book”, a TikTok alternative that has shot to the top of the US app store even though it’s also Chinese-owned.
Americans might still be better off downloading TikTok. A ban will remove the social media platform from app stores and prevent users from getting updates, but those who already use it should be able to keep doing so until it becomes obsolete.

No thanks.
ByteDance hopes it won’t come to this. The company has asked the Supreme Court to review the law, saying a ban violates the free speech protections of TikTok and its users. But the justices look like they will side with the US government, which argues that restrictions on foreign-owned businesses are common and that without a sale TikTok could be used as a tool for Chinese surveillance and propaganda.

Past lives. Trump used to think the same. The president-elect tried to block TikTok in his first term, labelling it as a national security threat. Now TikTok is a “unique medium for free expression”. Trump’s road to Damascus runs through his own TikTok account, which has nearly 15 million followers; and Jeffrey Yass, a billionaire Republican donor whose trading firm owns 15 per cent of ByteDance (Yass personally holds a 7 per cent share).

Trump denies talking about TikTok when he met Yass last February, but days later he publicly reversed his position on the app and said a ban would empower Facebook, or “the enemy of the people”. Four months after that, he created a TikTok account.

Trump’s options. In December, Trump filed a friend-of-the-court brief trying to delay the ban until his return to office. Failing that he could provide a three-month extension for ByteDance to finalise a sale; or declare TikTok to be in compliance with the law. Both would face legal challenges if ByteDance isn’t actually divesting.

The alternative. ByteDance could agree to offload TikTok before Sunday. The most serious buyer is a consortium of investors including Frank McCourt, former owner of the Los Angeles Dodgers, and Kevin O’Leary from the TV show Shark Tank. The group put in an offer last week. The problem: ByteDance doesn’t want to sell.

What’s more… The consortium wants to buy the US version of TikTok without the algorithm and rebuild it with their own technology.

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