Goodbye TikTok?

The Supreme Court has ruled against TikTok ... what now?

Today, the US sees the start of a new Presidency. But it could also be the end of another reign in America: TikTok.

The Supreme Court last week ruled against the app, bringing in a nationwide ban. Yesterday, the ruling came into effect - and TikTok went dark in the US. Last night, Trump promised the app a reprieve, and TikTok HQ brought the lights back on. By the time you read this, things may have changed yet again.

TikTok is dangerous. It’s far more addictive than anyone gives it credit for, it’s packed full of harmful content, and it’s almost definitely a propaganda and data harvesting tool of the Chinese Communist Party. I’ve written all of these things before.

But it’s also, now, a major part of the Western economy. There are thousands of ‘influencers’ on TikTok raking in real cash, businesses that use TikTok as their primary marketing source, people employed as TikTok account managers for businesses of all sizes. Take these numbers with a pinch of salt, because they come from research commissioned by TikTok, but the scale is astronomical:

• $14.7 billion in revenue for small- and medium-sized businesses in 2023

• 7 million U.S. businesses rely on TikTok, supporting 224,000 jobs

• 6,700 Americans employed directly by TikTok

Even if the ban is reversed, the impact will be huge. Creators will move off of TikTok, businesses will cut their losses and abandon it as a marketing tool, thousands of jobs at TikTok HQ will be lost.

The ruling, interestingly, cited the risk that the CCP are using the app to collect data on Americans. They did not rule on, what to me feels like the greater risk, that the CCP are using the app to spread propaganda or manage Americans’ access to information.

Whatever they are using it for, the Chinese government retains a ‘golden share’ in TikTok’s parent company ByteDance - giving them the power to veto anything the company does.

Trump’s intervention

TikTok has been thrown a life raft, but the ruling remains: without a change in direction, TikTok will eventually be banned in the US.

But TikTok won’t go down without a fight, and my money is still on the app staying afloat long-term. So, how might they survive?

First, they could find an American buyer. This would be the most straightforward way to keep the app alive in America, and get a good payout from it (and, as far as I can tell, there’s no reason that buyout couldn’t include royalties or dividends in perpetuity).

There’s also no shortage of potential buyers. Amazon, Elon Musk and MrBeast are all supposedly mulling the option of buying TikTok - and may even have offers on the table.

That TikTok hasn't seriously pursued this option yet is perhaps a further indication that owning the app is important to someone…

Second, Trump could intervene. The inauguration is today, and Trump has said about TikTok: "it ultimately goes up to me, so you're going to see what I'm going to do." He's already committed to a reprieve, and he's indicated previously it'll last about 90 days.

Trump’s primary policy goal is popularity at all costs. If the people want TikTok, he’ll give it to them - regardless of the national security implications. That it’ll set him apart from Biden and champion his free speech credentials will be a bonus.

My prediction is that he will frame TikTok as a pawn in a negotiation with China. Trump loves to win one over on China, and so he’ll take the opportunity to say “I let China keep TikTok, but in return America will get…”. It’ll seem like a win, win, win: but it will likely be more fluff than substance.

What next?

TikTok has been banned before. The Indian government banned TikTok after a military clash that killed 20 Indian soldiers. In India, the ban was swift: and creators and users moved to Meta-owned Instagram and Google-owned YouTube Shorts in response. The American tech companies, then, were the big winners of that ban. They may be rubbing their hands together if this ban goes ahead.

But American consumers are so far going in a different direction. The Supreme Court is no doubt dismayed to learn they are driving Americans further into the arms of China, with almost a million sign-ups to RedNote, another Chinese app and one where - incredibly rarely for Chinese social networks - users in China can interact with users in the rest of the world.

It’s unlikely RedNote will take off. Just as Bluesky, Threads and Mastodon tried to take on Twitter in the wake of Elon Musk’s buyout, a few copy-cat apps will rise and fall in pursuit of exiled users. The true victor will end up being the giants: Meta and Google.

But my money’s on Trump rescinding the ban permanently. Everyone wins - except for the TikTok users that continue to spend hours a day consuming potentially dangerous content and Chinese government propaganda. By the time you read this, we may know for sure.

Policymakers should pursue ways to make social media safer and better, while giving Americans choice and free speech. Outright bans rarely work and rarely last - but the aspiration must remain.