Joe Biden recently joined TikTok, introducing himself with a brief video titled “lol hey guys.” Just two months later, on April 24th, the President of the United States endorsed a legislative bill aimed at potentially prohibiting the widely used app. The day before, the Senate had approved a proposal targeting “foreign adversary controlled applications,” including TikTok. This was part of broader legislation that also provided military assistance to Ukraine, Israel, and Taiwan. President Biden promptly signed the bill into law, disregarding the reactions of his 300,000 followers and TikTok’s 170 million users in the U.S.
The legislation mandates that ByteDance, the Chinese company owning TikTok, divest its interests to non-Chinese entities within 12 months—an extension from the six-month period initially proposed, conveniently postponing the deadline until after the upcoming November elections. Various potential buyers have expressed interest in TikTok, including tech giants like Microsoft, Oracle, and Walmart, and former Treasury Secretary Steven Mnuchin is reportedly assembling an investment group.
However, the opportunity for these entities to make an offer might not materialize. The Chinese government, which holds a stake in a ByteDance subsidiary, has expressed reluctance to relinquish control over TikTok. It has specifically classified TikTok’s recommendation algorithm as a sensitive technology that requires governmental approval for export. In March, a Chinese official cautioned that any dealings with TikTok must comply strictly with Chinese laws, a statement some interpreted as a direct warning to ByteDance.
If forced to comply, TikTok might have no choice but to cease operations in the United States, where it reported earnings of $16 billion last year, as per the Financial Times. The company is thus seeking legal recourse, hoping the U.S. courts will rule in its favor. A company memo described the newly passed bill as a breach of the First Amendment, which guarantees free speech rights.
Evelyn Douek, from Stanford Law School, supports TikTok’s position, stating that historical legal precedents do not favor government prohibition of communication platforms based on content, even when involving foreign entities. TikTok has previously succeeded in court, having overturned a Montana state ban and a federal executive order from President Donald Trump in 2020, both of which were challenged on free speech grounds.
Those advocating for the ban argue that the issue lies not with TikTok’s content but with its operations, accusing the platform of data harvesting and content manipulation—claims TikTok denies. The company’s fate may hinge on whether it can convince the courts of its innocence; a failed defense could lead to its closure, similar to a 1986 Supreme Court case involving an adult bookstore in New York, which was shut down not for its content but for other illegal activities on its premises.
Should TikTok prevail in court, it could emerge as an even more dominant player in social media. According to Mark Shmulik of Bernstein, a brokerage firm, TikTok has been competitively handicapped against domestic rivals. If the legal threat is lifted, TikTok could aggressively expand its operations. This might also stabilize the company’s leadership, which has seen significant turnover, including the departure of Kevin Mayer, a former Disney executive, and Vanessa Pappas, the COO. Erich Andersen, the chief counsel, is also reportedly planning to leave.
Regardless of the court’s decision, TikTok is assessing which other countries might adopt the U.S.’s stringent stance. Following a border conflict with China, India banned TikTok and other Chinese apps in 2020. Other countries, including Indonesia and Pakistan, have temporarily banned and then reinstated the app. The Taliban banned TikTok after regaining power in Afghanistan.
For now, major European markets appear secure, with no significant demand for TikTok to be sold. However, Europe tends to align with the U.S. on China-related security issues over time, as seen with the delayed action against Huawei. The readiness of countries to take similar measures may depend on their security ties with the U.S. Members of the Five Eyes intelligence alliance—Australia, Britain, Canada, and New Zealand—have already prohibited TikTok on government devices.
If further restrictions are imposed on TikTok, the repercussions could extend beyond the social media market, especially if China retaliates. China recently banned app stores from offering Meta’s WhatsApp and Threads, citing national security concerns. This could signal broader difficulties for American corporations in China. Companies like Tesla, Apple, and American chipmakers are already feeling the impact, as China promotes the use of domestic technologies. Banning a popular short-video app could have long-lasting implications for the U.S.
