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Everything marketers need to know about the possible TikTok ‘ban’ in the USA

Pressure is mounting on TikTok as a new bill is passed in the House of Representatives that could potentially ban the app from the United States of America due to privacy and security concerns. 

But what does this bill actually do? Why is TikTok considered a threat to national security? How should I adjust my marketing campaigns in light of this news? 

We have answers to all of these questions – and more – below! 

What is TikTok?

TikTok is a short-form video platform. It hosts user generated content ranging from three seconds up to 10 minutes on the service. It’s the fifth most popular social network in the world, and with over 1.21 billion users, it is used by 23% of the global internet connected population.

Why is TikTok so controversial?

TikTok is owned by ByteDance, which is a Chinese company. There are concerns that the Chinese government (Chinese Communist Party, CCP), have influence over ByteDance, and are using the app to spy on users, and push particular political agendas through subtle tweaks of the algorithm. 

It is important to note that, officially, there is no evidence of the CCP having control over TikTok or ByteDance. TikTok CEO Shou Zi Chew is a Singapore resident, and has testified in a congressional hearing that the company is independent of government control in an effort to downplay privacy concerns. 

That said, the state-owned China Internet Investment Fund does own a 1% stake in ByteDance’s subsidiary brand, Beijing ByteDance Technology, which runs the Chinese version of TikTok, called Douyin. China also has laws that mandate internet companies hand over data whenever requested, under the guise of national security. 

That’s troubling on its own, but worse when you consider a former ByteDance executive claimed in a legal filing that data was accessible to Chinese government officials, and the data of US citizens was also accessible to employees. Privacy concerns were compounded when TikTok admitted accessing user data to spy on journalists who were reporting on the company – despite previously saying that such action was impossible. 

But the controversies don’t end there. Aside from the political and privacy aspects, there is also the psychological impact of TikTok (and social media at large), and what it is doing particularly to the mental health of young people. The number of studies assessing the changes that social media is making to the brains of young people are few – but growing. To date there is no definitive consensus, but there does seem to be a causal link between adolescent social media use and an increased risk of anxiety and mood disorders. At the extreme, we have seen the disastrous effects of algorithms perpetuating images of self-harm and suicide ideation. TikTok isn’t immune from that. 

Indeed, separately from the Federal bill, a number of individual states have tried to ban TikTok. In 2023, Montana passed legislation to prevent app stores from offering TikTok, but that was blocked before coming into effect. This year, Florida’s legislature passed a bill that would prevent anybody under 16 from having social media, regardless of parental consent. It was vetoed by Gov. Ron DeSantis, but only because a similar bill was being worked on in the legislature that would recognise the authority of parents. 

The history of the TikTok ban movement

The roots of the TikTok ban actually came from the previous US administration. President Donald Trump announced in July 2020 that TikTok would be banned in the US within days if ByteDance didn’t agree to divest ownership to a US based company. While the decision may have been in response to security concerns, it’s just as likely that it originated from either his protectionist mentality, or retaliation for TikTokers pranking his campaign rallies. 

Regardless of motivation, ByteDance initially agreed to divest the company in August 2020, and a provisional deal with Microsoft was submitted for Trump’s approval. What proceeded was a ‘will they, won’t they’ back and forth, with Trump signing multiple executive orders setting ever-further deadlines for TikTok’s sale. ByteDance sued, claiming that the order was politically motivated. On August 28, China updated its export control rules to include technology that runs data analysis to provide personalised recommendation services – in effect requiring government approval for any sale. 

The deal with Microsoft fell apart in September due to the belief that the Chinese government would reject any attempts to sell the underlying technology of the algorithm. Oracle became the frontrunner in the talks, with plans to become minority stakeholders in a spun out US division, and would assume responsibility for data processing in US jurisdictions. 

Further additional lawsuits were filed against the administration, and a preliminary injunction was approved on 27 September. 

Following Trump’s defeat in the 2020 US elections, the executive order requiring the ban was reversed by President Biden, but security concerns around the app continued. In 2023, many major western governments, including the UK, France, the Netherlands, Australia, and New Zealand, banned public sector and government employees from installing the app on work devices over fears of security. 

Is there a TikTok ban bill? 

On 14 March 2024, the Protecting Americans from Foreign Adversary Controlled Applications Act passed the House with significant bipartisan support, receiving 352 votes in favour, and just 65 against. The vote was fast-tracked after passing unanimously 50-0 through the House Committee on Energy and Commerce, who had received a briefing from intelligence agencies about the risks posed by apps controlled by foreign powers.

TiKTok potentially played straight into the narrative by sending a push notification to their 170 million US users, encouraging them to call their representative to try and save the app. The notification allowed users to quickly find the contact details for their representative, leading to a deluge of calls. This was immediately pointed to as an example of how the app can manipulate the actions of US citizens. 

At time of writing the bill is yet to pass in the Senate, and its success is far from guaranteed. A number of senators have already expressed their concerns over the bill, citing first Amendment issues (free speech), and the chilling effect it might have on commerce and investment. Lobbying by ByteDance will undoubtedly play a role too. However, President Biden has already said he will sign the bill if it reaches his desk. 

All of this is predicated on the assumption that the bill is even put to a vote. 2024 is an election year, and there is a lot of focus on budget bills at the moment, so there is every chance the bill might die in the Senate.

In summary, while there is currently a bill progressing through Congress to ‘ban’ TikTok, there’s a long way to go before it becomes law. 

What would a TikTok ‘ban’ actually mean? 

So this is where nuance comes into play. Throughout the article, the word ban has been in inverted commas, and that’s deliberate. The wording of the bill is such that it’s not actually ‘banning’ the app – it’s mandating a divestiture. Should the bill become law, ByteDance will have 165 days to sell TikTok or it will be banned from US app stores. 

This means that users wouldn’t be able to download the app on either iOS or Android devices, and web-hosting companies would be banned from distributing the service. 

The narrative coming from legislators is that their preference would be a divestiture, where ByteDance sells off TikTok to a separate company. 

It’s worth noting that there is precedent for such a sale. In 2020, Grindr was sold to San Vicente Acquisition following security concerns raised by the Committee on Foreign Investment in the United States (CFIUS). However, the sums of money involved in TikTok, and its alleged propaganda potential to the CCP, make the two services harder to compare. 

So TikTok isn’t going to be banned? What’s the problem then?

It’s premature to say that TikTok won’t be banned, but certainly, it faces an uphill battle. 

As mentioned, the Senate still has to pass the bill, which is definitely not guaranteed. Even if that bill passes, you can bet there will be lengthy court challenges from ByteDance, which could further complicate matters. Legislators say that TikTok won’t be banned at all if it’s sold, but that is easier said than done. 

TikTok is a private company, but analysts say that the app could be valued at as much as $100bn. That’s a colossal amount. Even if China refused to allow the sale to include the recommendation algorithm, some say it could be worth $40bn – still hugely expensive.

There simply aren’t that many companies that could afford an acquisition outright. 

Alphabet (Google), Meta, or Apple could all make the purchase, but all would be blocked on antitrust grounds. Meta in particular is under constant scrutiny for their dominance in social media. Ignoring Apple’s antitrust lawsuit from the DOJ, the company has never expressed much interest in getting into social media, outside of their ill-fated Ping network, launched in 2010 (and killed just 2 years later).

Microsoft could be interested, but having been burned once it’s hard to believe they’d rush back into fray, and increasingly their focus seems to be on AI – it’s hard to imagine them being interested in wading into managing a social media platform, and all the moderation aggro that comes with it. 

Private consortiums might be a possibility, but that’s still a lot of money to raise, and 165 days leaves very little time for that work to be completed. It’s likely that the Federal Trade Commission would want to investigate any acquisition to ensure there won’t be harm to the market. 

So, while the preference (for legislators) is for the app to be sold and business to continue largely uninterrupted, the reality will be far more complicated. 

Are other apps affected by this?

In a nutshell, yes. 

The Committee for Energy and Commerce has published a web page that fact-checks the bill, and explicitly states:

“It…applies to applications and websites controlled by a foreign adversary—China, Russia, Iran, North Korea—that pose a clear national security threat.”
The Committee for Energy and Commerce

Although ByteDance Ltd is explicitly named, there are a number of apps that could also fall under its purview. The bill targets any website or app that allows users to create a profile to share content, and that service needs to have one million active users. This means apps like Shein, Temu, and even the communication app Wechat could fall foul of the bill. 

But there’s also the second-order effects of this bill. Should the bill pass, and should TikTok either a) fail to find a buyer or b) sell the product without the recommendation algorithm, that suddenly makes incumbent US social media platforms much more competitive. Already Meta, Google, and to a lesser extent Snapchat, have pivoted to short-form video. The key differentiator is how effective the algorithm is at getting videos in front of relevant audiences, but if that is taken out of the equation it will become a race to both provide a compelling, monetisable product that puts tools in the hands of creators as TikTok has.  

That comes with its own questions. Is it better that power over social media become further concentrated among a few companies, even if they are US based? Evidence suggests they haven’t been the best stewards of public discourse in the past, but US legislators seem to view it as an acceptable risk. 

I’m currently marketing on TikTok, what should I do?

For the time being, there is probably no reason to panic or change your approach. 

If your audience is on TikTok, then it is in your interest to stay on the platform for now so you can continue to benefit from that reach and engagement. The bill will take a while to pass through the Senate, and even if it passes there is another 165 days before the platform is pulled from App Stores – and that’s only if it isn’t sold, and only in the USA. That gives you plenty of time to make a decision about where to move should you need to. 

That said, there is no harm in starting to investigate your options. In the unlikely event that TikTok is actually banned, you’ll see creators quickly pivot to other platforms. While a ban might see new, non-Chinese apps appear over time, the incumbents will be at an advantage due to their existing tech pipeline and revenue streams. This means platforms like Meta’s Facebook, Instagram and Threads might see a surge. Likewise, YouTube Shorts, Snapchat and Reddit might all see growth as users flock to find new communities. X (formerly known as Twitter) is also currently positioning itself to be a video platform, so it’s possible that it might become competitive for short-form video content, although it certainly comes with its own risks. 

For those of you who are posting on TikTok but are finding your audience is elsewhere, ask yourself whether TikTok is worth the effort? Unless you are blessed with an unlimited marketing budget, posting on a platform that isn’t generating a meaningful return is just a waste of time and money. Use this news as an opportunity to redirect more of your spend to where your audience is, and potentially enjoy a better ROI. 

Remember, TikTok is just one platform. There will be others that offer the same functionality, and audiences will naturally gravitate towards alternatives. Don’t just rush onto every platform, take the time to assess what each one offers, and establish where your audience is. 

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