Among its 150 million U.S. users, TikTok is a nearly universally loved social media app that spans everything from goofy dance videos to a window into salary transparency. Among government officials, however, it’s a potential threat. And it may not be welcome in the U.S. much longer.
The app has managed to do what few other things have accomplished in the past decade: Make Republicans and Democrats stand shoulder to shoulder.
This uniformity was on display prominently in March when TikTok CEO Shou Zi Chew testified before lawmakers in the House Energy and Commerce Committee.
“You have unified Republicans and Democrats and if only for a day, we’re actually unified because we have serious concerns,” Rep. August Pfluger (R -Texas) told the social media executive.
Whether the government will outright ban TikTok or not is something that likely won’t be decided imminently. There are matters of national security, foreign relations and the impact on American businesses to be figured out first. But if you’re just taking an interest in the whole imbroglio, here’s a quick look at where things stand and what a possible ban would mean for various parties.
Why are people concerned about TikTok?
TikTok’s parent company, ByteDance, is based in China—and officials worry the tremendous amount of sensitive personal data TikTok collects could be accessed by China’s government, making the app a security risk (Chinese law allows the government to secretly demand data from Chinese companies for intelligence-gathering). There are also fears China could use the app for misinformation. TikTok has denied any of this has happened.
What are the possible ways this could play out?
Should Congress decide to ban the app, it could do so in a variety of ways. Donald Trump attempted to ban the app in 2020, but that was overruled as the courts said he didn’t have the legal power to do so. Congress is now contemplating giving that authority to President Biden.
Some members of Congress, though, worry such authorization could have negative implications on free expression.
Should Biden ban the app, with or without the backing of Congress, there’s sure to be a court fight. And, even if Congress authorizes the move, that’s not a guarantee it would hold up to legal scrutiny. If nothing else, TikTok would gain a little time in the U.S. as the appeal process played out.
It’s also possible ByteDance could sell or spin off TikTok. China has expressed strong opposition to this, however, and TikTok’s management does not seem to favor it either.
What would a ban mean for the creator community?
For some creators, it would be a big financial blow. The highest-paid celebrities on the app took in $55.5 million in 2021, which was a 200% increase from 2020, according to Forbes. Charli D’Amelia took in $17.5 million alone. The top stars have sponsorship deals and have used the platform to launch careers in other mediums, including the music industry. They could, of course, build followings on other brands, but there’s no guarantee all of their audience would follow them.
There’s another subset of creator that might not make millions, but still makes a living with their TikTok posts. Losing the app would threaten their status as an independent contractor, right at a time where there are storm clouds gathering on the economic horizon.
Still others, especially teens, use TikTok as a community tool, connecting with people who have similar interests. Should the app disappear, many of those relationships would likely vanish as well. That could hit some kids hard, especially after the isolation of the pandemic.
What would a ban mean for businesses?
Given how enormous TikTok has become, businesses have long since started using it as a marketing tool. Entire corporate units are dedicated to finding snappy ways to promote a brand. Should TikTok be banned, that could impact sales for some companies and result in job loss for some of those social media-focused workers. While several other companies, including Snap and Instagram, have their own version of short-form video feeds, so far none has proved to be a viable competitor.
For small businesses, the problems could be magnified, as an increasing number have turned to TikTok to grow their customer base. (One small business person saw their company’s revenues jump from $20,000 in 2019 to $1.8 million in 2022, largely off of business built off TikTok.) There are other forms of advertising, of course, but they’re considerably more expensive—and beyond the reach of many small businesses.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Chris Morris
Chris Morris is a veteran journalist with more than 30 years of experience, more than half of which were spent with some of the Internet’s biggest sites, including CNNMoney.com, where he was Director of Content Development, and Yahoo! Finance, where he was managing editor. Today, he writes for dozens of national outlets including Digital Trends, Fortune, and CNBC.com.
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