A few weeks ago, we examined TikTok’s uncanny ability to provide entrepreneurs with major marketing opportunities at the expense of brand control. The potential downsides of the latter became clear last week when President Biden signed a bill into law that could ban the social network in the U.S. Under the provisions of the bill, which passed both the House and Senate with considerable support, TikTok’s Chinese parent company ByteDance has 270 days to sell the app to an American owner or else it will be barred from the U.S. market. Lawmakers became concerned about the national security risks presented by TikTok, claims that the company contests.

“This unconstitutional law is a TikTok ban, and we will challenge it in court,” said TikTok in a statement. The company went on to say that it has invested billions to ensure that its U.S. platform is safe and “free from outside influence and manipulation.” TikTok’s upcoming legal challenge could delay its sale deadline, which may also be further extended by three months according to the terms of the law. But if the suit fails and the TikTok ban takes effect, by 2025 the app may disappear from smartphone stores and eventually stop working as domestic updates cease. Apple and Google are already familiar with removing apps from countries: just last week, China demanded the deletion of Whatsapp, Signal, and Telegram from the App Store.

Still, there’s no telling if the law against TikTok will be declared constitutional. When a ban against the app was signed into law in Montana last year, a judge ruled that it “likely violates the First Amendment.” More free speech issues could arise if the government calls on Internet service providers to prohibit access to TikTok. Whether the app stays or goes, however, short form video platforms are here to stay. YouTube Shorts has more than 70 billion views per day while users on Instagram share Reels 3.5 billion times per day. These competitors could siphon more users from TikTok if the app changes drastically under new ownership.

Questions:

1. What sort of impact do you think a TikTok ban would have on entrepreneurs who depend on the app for marketing? 
2. Do you think that a potential U.S. ban on Tiktok is a good idea? Why or why not?

Source: Ann-Marie Alcántara and Joanna Stern, “TikTok Isn’t Going Away—at Least Not Yet. Here’s What to Know,” The Wall Street Journal, April 24, 2024.