So what comes next with the TikTok sell off?
Earlier today, U.S. President Joe Biden signed the proposed TikTok sell-off bill into law, meaning that TikTok now has 270 days to be sold to a U.S.-based owner, or be banned in the nation. TikTok has vowed to fight the bill in the courts, with TikTok CEO Shou Xi Chew labeling it an unconstitutional attack on the app.
But is it, and what are TikTok’s chances of winning a court battle to maintain its Chinese ownership?
Here’s a look at some of the questions around the TikTok ban.
Could TikTok defeat the bill via legal means?
Despite this coming from the desk of the U.S. President, as noted by Chew, TikTok’s confident that it will be able to defeat the bill in court, by arguing that the proposal is fundamentally unconstitutional.
As per TikTok:
“We believe the facts and the law are clearly on our side, and we will ultimately prevail. The fact is, we have invested billions of dollars to keep U.S. data safe and our platform free from outside influence and manipulation.”
As outlined in Platformer (which has an excellent rundown of the possible outcomes of TikTok’s legal options), the Government will most likely seek to defend the bill on national security grounds, which would provide the government with broader powers above and beyond the technicalities that TikTok may seek to highlight.
The evidence around data misuse and manipulation may not be enough to convince the court of their case, but under the national security banner, it does seem more likely that the bill will hold up under scrutiny.
So TikTok could challenge, and potentially defeat it in the courts. But it does seem like that won’t ultimately be a pathway to maintaining the situation as is.
How long till TikTok is shut down in the U.S.?
Under the bill, TikTok will now have 270 days to divest, though there’s also an additional provision which could see TikTok apply for an extra three months under certain conditions (e.g. if it’s negotiating with buyers and needs more time to finalize the deal).
So a year, TikTok has a year until it either needs to be in U.S. ownership or it’s gone.
So it’s not going to disappear tomorrow, and there’s still plenty of time for the related parties to work out an alternative outcome for the app.
The most significant catch here, which could prevent any sell-off happening, is that the Chinese Government has vowed to oppose the sell-off push.
So even if TikTok can find a potential partner it likes, it may not be able to enact a sale either way.
Which companies might look to buy TikTok?
I saw someone suggest that Meta will be looking to buy TikTok if it is put up for sale.
Like, no, Meta’s not going to buy TikTok. I mean, the FTC is still trying to force Meta to divest WhatsApp and Instagram, on the basis that it gives them an unfair advantage in the digital ads market. There’s no way that Meta would be allowed to buy TikTok, even if it wanted to.
Based on the previous TikTok sweepstakes, which was sparked by former President Donald Trump trying to force the app into U.S. ownership in 2020, the top candidates, at that stage, were Oracle, Microsoft, Walmart, and Triller.
Oracle would likely still have an interest in acquiring the app, and it’s been heavily involved in TikTok’s “Project Texas”, which was designed to address concerns about U.S. user data being sent to China. Microsoft’s probably out of the running, given its massive investment in OpenAI, and its broader shift towards AI projects, and Walmart was only a partial bidder, and likely wouldn’t be looking to make a bid, at least not on its own. It also seems unlikely that Triller would be in a position to make a bid.
Last month, reports circulated that former Treasury Secretary Steven Mnuchin was putting together an investor group to make a bid for the app, while former Activision CEO Bobby Kotick has also expressed an interest.
A key provision, however, would be the inclusion of TikTok’s algorithm code, which current owner ByteDance will likely be reluctant to include in any sale. Indeed, it may not even be able to, given that China’s cybersecurity rules include provisions that may restrict the sale of such.
TikTok’s algorithm is its true secret sauce, and if it’s not part of the deal, the asking price will be significantly reduced, and the field of potential suitors will also shrink.
Will other nations now also look to ban the app?
This is a major concern for TikTok, that other nations will now also follow the U.S. lead, and implement similar rulings.
Theoretically, if TikTok does end up being sold to a U.S. company, most Western nations would seemingly be okay with their user data also being stored in the U.S., as that’s the current situation with every other social app. But E.U. officials have also been pushing for European user data to be kept in Europe, similar to the U.S.
The closest precedent here is the bans of TikTok on Government devices, which have spread through Western nations over the past few years. Once one nation looks to enact restrictions, others follow suit. Which makes sense, since they’re all acting on the same cybersecurity advice, but it could also indicate that other nations may look to implement similar restrictions on TikTok, unless it does institute clear delineation between itself and its Chinese homeland.
Essentially, this could end up being a domino effect, which will see TikTok face more bans, in more regions, as a result.
Should we reduce our focus on TikTok?
This one’s really hard to answer, because while TikTok is facing a potential ban, given the money at stake, you would assume that, somehow, someway, an agreement will be enacted to keep the app running in the U.S.
Having a diversified digital strategy is always important, and the discussion here once again highlights the importance of not putting all of your eggs in one basket. But at this stage, I wouldn’t say that you should be moving away from TikTok as such, but that you probably should be considering how you’re using other platforms at the same time.
Instagram Reels and YouTube Shorts will be the most obvious beneficiaries, and given their similarities to TikTok, they seem like the best alternatives to consider, even if only through re-posting and building a presence. Snapchat Spotlight could also be a consideration, depending on your audience.
But yes, you should be considering alternatives, though you should always be exploring such either way.
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There’s still a lot more to come in the TikTok divestment push, and it wouldn’t surprise me if this becomes a bigger point of contention between the U.S. and China, as the battle continues for the app.
Which is amazing to consider. At the core of diplomatic relations between two global superpowers is an app that’s primarily focused on light-hearted dance clips.
Wild times.