The clock is running out on TikTok’s U.S. ambitions.
President Joe Biden on Wednesday (April 24) signed a bipartisan measure that gives TikTok’s owner, Chinese tech giant ByteDance, nine months to a year to sell the video-sharing social media platform or see it banned in the U.S.
Biden’s action followed the measure’s passage in the Senate on Tuesday (April 23) by a vote of 79-18.
“This unconstitutional law is a TikTok ban, and we will challenge it in court,” the company said in a Wednesday statement on X.
“It is unfortunate that the House of Representatives is using the cover of important foreign and humanitarian assistance to once again jam through a ban bill that would trample the free speech rights of 170 million Americans, devastate 7 million businesses, and shutter a platform that contributes $24 billion to the U.S. economy, annually,” TikTok said in a statement provided to PYMNTS on April 21, a day after the U.S. House of Representatives passed the legislation that has now been signed into law.
The fear from lawmakers is that TikTok’s ocean of private user data is being analyzed and employed by the Chinese Communist Party.
“From sharing Americans’ data with the CCP to its impact on our nation’s children, TikTok poses the gravest risk to our national security,” U.S. Rep. Patrick McHenry, R-N.C., said in a March statement.
For its part, TikTok has maintained that it has ceased any questionable data practices, and taken steps to insulate itself from the influence of Chinese authorities.
A ban on TikTok in the U.S, would have far-reaching consequences for businesses, users and the broader social media landscape.
Not the least of which is who might end up buying the divested platform.
Read more: TikTok: Ban Will Hurt 7 Million US Businesses
TikTok has become a cultural phenomenon in the U.S., where millions use the platform for entertainment, education and business purposes. A ban could not only disrupt the social media landscape but also impact the livelihoods of content creators and businesses that rely on the platform for their operations.
But a ban is not the only possibility, as ByteDance could instead sell the app a buyer who’s not associated with any foreign adversary of the U.S.
And while, as reported here, former Treasury secretary Steven Mnuchin is assembling a group of investors in an attempt to purchase TikTok, he is not the only potential suitor.
TV personality and O’Leary Ventures Chairman Kevin O’Leary and former Activision CEO Bobby Kotick have also expressed interest in purchasing TikTok’s US business, while ByteDance’s U.S.-based Big Tech peers, such as Microsoft, Meta and even Oracle, have all been floated as potential buyers by observers.
When then-President Trump was in office, he pressured Microsoft to acquire TikTok.
But it isn’t just the U.S. that is proving inhospitable to the Chinese social media platform. TikTok also faces challenges in the European Union, where the European Commission (EC) said in February that it has opened formal proceedings against the app under the Digital Services Act, while TikTok has been banned in India since 2020.
Read more: What a Ban on TikTok in the US Could Mean for Brands and Retailers
And many U.S. businesses, including several top venture funds, are quite literally invested in how the TikTok saga ends up playing out domestically.
Per a Financial Times report, billionaire investor Jeff Yass can thank an early investment in ByteDance for much of his net worth, and any TikTok ban would severely dent it. Investment firms Notable Capital and the Middle East-based G42 have sold their holdings in TikTok’s parent as a result of the political risk.
Per The New York Times, private equity firm General Atlantic invested in ByteDance in 2017 and Bill Ford, General Atlantic’s CEO, has a seat on ByteDance’s board of directors. Other notable U.S. investors include private equity firms KKR and the Carlyle Group, as well as hedge fund Coatue Management.
Still, even as the future of TikTok hangs in the balance, brands continue to leverage the platform’s wide audience of young consumers to drive engagement and sales. At least for now.
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