TikTok on the Brink of Shutdown: A Last-Minute Reprieve
A Looming Ban Threatens TikTok’s Existence
TikTok buzzed with nervous anticipation across the U.S. on Saturday as a looming federal ban threatened to sever access to the Chinese-owned app that has captivated nearly half of all Americans, powered small businesses, and shaped online culture.
The Company’s Dilemma
The company said late Friday that it will go dark in the United States on Sunday unless President Joe Biden’s administration provides assurances to companies like Apple and Google that they will not face enforcement actions when a ban takes effect.
The Ban: A Major Milestone in U.S. History
The ban would be enacted under a law signed by President Joe Biden in April and mark the first U.S. shutdown of a major social media app — with TikTok boasting about 170 million domestic users and an estimated $20 billion in 2025 revenue.
Supreme Court Upholds the Ban
Supreme Court justices upheld the ban on Friday in a unanimous decision, and a White House statement suggested Biden would not take any action to save TikTok before the deadline.
Consequences of the Ban
Without a decision by Biden to formally invoke a 90-day delay in the deadline, companies providing services to TikTok or hosting the app could face legal liability. It is not clear if TikTok’s business partners, including Apple, Alphabet’s Google, and Oracle, will continue doing business with it before Trump is inaugurated on Monday.
Uncertainty and Contingency Planning
Uncertainty over the app’s future had sent users – mostly made up of younger people – scrambling to alternatives including China-based RedNote. Rivals Meta (META.O) and Snap (SNAP.N) had also seen their shares rise this month ahead of the ban, as investors bet on an influx of users and ad dollars.
Marketing Firms in a "Hair on Fire" Moment
Marketing firms reliant on TikTok have rushed to prepare contingency plans this week in what one executive described as a "hair on fire" moment after months of conventional wisdom saying that a solution would materialize to keep the app running.
A Possible Reprieve Under Trump’s Presidency
There have been signs that TikTok could make a comeback under incoming U.S. President Donald Trump, who wants to pursue a "political resolution" of the issue and had last month urged the Supreme Court to pause implementation of the ban.
The Decision Lies with Trump
Trump said on Friday the decision on the future of the TikTok app will be up to him, but he did not provide any detail about what steps he would take. Media reports have said that he was considering an executive order that would suspend the enforcement of the TikTok sale-or-ban law for 60 to 90 days.
The Future of TikTok
TikTok CEO Shou Zi Chew plans to attend the U.S. presidential inauguration on Jan. 20 and sit among high-profile guests invited by Trump, a source told Reuters.
Suitors Emerge
Suitors including former Los Angeles Dodgers owner Frank McCourt have expressed interest in the fast-growing business that analysts estimate could be worth as much as $50 billion. Media reports say Beijing has also held talks about selling TikTok’s U.S. operations to billionaire and Trump ally Elon Musk, though the company has denied that.
ByteDance’s Ownership Structure
Privately held ByteDance is about 60% owned by institutional investors such as BlackRock and General Atlantic, while its founders and employees own 20% each. It has more than 7,000 employees in the U.S.
Conclusion
As the deadline looms, the fate of TikTok hangs in the balance. Will the company be able to find a solution to the looming ban, or will it be forced to shut down? Only time will tell.
Frequently Asked Questions
- What is the reason for the ban?
The ban is due to concerns over national security. - What is the deadline for the ban?
The deadline is Sunday. - What are the consequences of the ban?
Companies providing services to TikTok or hosting the app could face legal liability. - Who has expressed interest in buying TikTok?
Suitors including former Los Angeles Dodgers owner Frank McCourt and billionaire Elon Musk have expressed interest.