What If TikTok Loses Its Fight Over the Ban in the US
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What If TikTok Loses Its Fight Over the Ban in the US


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In April, President Joe Biden signed into law a bipartisan measure that is soon to bring the social media application in the United States offline, unless its Chinese proprietor relinquishes control over it.

TikTok's parent, ByteDance Ltd., was required to make a definitive decision on or before January 19, 2025, to give an American company one and a potential agreement to a deal, which technology giant has declared it unwilling to give.

TikTok, ByteDance and content creators have been engaged in a legal fight against the law going into effect but have so far not won.

Following the US Court of Appeals in the District of Columbia upon which TikTok argued against the law in September, the court issued a decision on Dec 6, which in turn ruled in favour of the divest-or-ban law.

TikTok is anticipated to challenge that decision via an appeal to the Supreme Court before the (late January) deadline.

Lawmakers are most concerned about TikTok's security risk to U.S. consumers, as China demand its companies, when requested, to give to their government any information that relates to U.S. national security.

There is a fear that the Chinese government will use the records of the users of the app, TikTok, for their own purposes, such as creating profiles, to blackmail them, and how it will shape the American content, that is, the content they will observe on the app.

TikTok has repeatedly slammed these anxieties and put in place more than US$2 billion (S$2.69 billion) project that it claims is fence off US users' data from China.

For the first time in the world's history, Congress has passed legislation targeting one named speech platform with a lasting, nationwide prohibition, and prohibiting any American from accessing a fledgling major, online community of over 1 billion people across the globe.

ByteDance has strong incentive to resist the segmentation of TikTok's hugely profitable (and expanding) business. Furthermore, implementation of any divestiture plan will require Chinese government approval, and Chinese authorities have publicly stated they would not accept a forced acquisition.

In addition, it is practically impossible, from a technical point of view, to disentangle the facts and fiction of TikTok's business from ByteDance.

Making things even more complicated is that President-elect Donald Trump has announced that he is opposed to a sale, after holding out against it while in the White House.

There may be future to Mr. Trump's opposition in what respect this app is concerned, at least, in light of how Mr. Trump has been linked to some of the major American investors in ByteDance, Susquehanna International Group Co-Founder Jeff Yass, Republican mega-donor, with over $US 15 billion exposure in the Chinese tech company.

ByteDance has announced it will not sell its U.S. TikTok business. But anyone who wants this company must also bring a deep endless pocketbook.

ByteDance is worth an estimated US$268 billion and although its US TikTok business is likely to be much less, it could still be valued in the range of US$40 billion to US$50 billion. In contrast, Mr Elon Musk acquired X, which is now known as Twitter, in 2022 for US$44 billion.

The restriction, in effect, would kill, the scale up of TikTok Shop, TikTok's social commerce strategy, that integrates entertainment together with impulse buying.

TikTok  Shop has been one of the fast-growing areas of the business, in the face of intense regulatory mate hood. The Shop is still a big risk for the company which continues to invest a huge amount of time and money on the long-term hope of business growing at least ten fold by 2024.


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