Analyzing TikTok's Future After US Sell-off Bill Approval

“Sociable” is the latest commentary on important social media developments and trends from industry expert Andrew Hutchinson of Social Media Today.

So what comes next with the TikTok sell-off?

Earlier today, President Biden signed the TikTok sell-off bill into law, giving TikTok 270 days to be sold to a U.S.-based owner or face a ban in the country. TikTok has stated that they will challenge the bill in court, with CEO Shou Xi Chew calling it an unconstitutional assault on the app.

original sound- TikTok

But is it, and what are TikTok’s chances of winning a court battle to maintain its Chinese ownership?

Here’s a look at some of the questions around the TikTok ban.

Could TikTok defeat the bill via legal means?

TikTok is confident that it will be able to defeat the bill in court, as noted by Chew, despite it coming from the desk of the U.S. President. They argue that the proposal is fundamentally unconstitutional.

We are confident that the facts and the law support our position, and we are optimistic about the outcome. It is a fact that we have invested billions of dollars to ensure that U.S. data is secure and that our platform remains free from external interference and manipulation.

According to Platformer, the government is expected to defend the legislation based on national security concerns. This would give the government more authority beyond the specific details that TikTok may focus on.

The evidence of data misuse and manipulation may not be strong enough to convince the court of their case. However, under the national security banner, the bill is more likely to withstand scrutiny.

This means that while TikTok could challenge and possibly defeat the bill in court, it does not seem like that will be a successful way to keep the current situation as it is.

How much time does TikTok have before it is shut down in the U.S.?

According to the bill, TikTok has been given 270 days to divest. There is also a provision that allows TikTok to apply for an additional three months under specific circumstances, such as when it is in negotiations with potential buyers and requires more time to complete the sale.

TikTok has a year left until it must be under U.S. ownership or be removed.

However, it won't be disappearing right away. There is still time for the involved parties to find a different solution for the app.

The Chinese government has promised to resist any attempts to sell TikTok, making it difficult for a sell-off to occur. This means that even if TikTok finds a potential partner, it may still not be able to complete a sale.

Which companies might look to buy TikTok?

I saw someone suggest that Meta will be looking to buy TikTok if it is put up for sale.

No, Meta is not going to buy TikTok. The FTC is still pushing Meta to sell WhatsApp and Instagram because they believe it gives them an unfair advantage in digital ads. It's unlikely Meta would be allowed to purchase TikTok even if they wanted to.

In the previous TikTok ownership scramble triggered by former President Donald Trump in 2020, the top contenders were Oracle, Microsoft, Walmart, and Triller.

Oracle is still interested in acquiring the app and has been actively involved in TikTok's "Project Texas" to address concerns about U.S. user data going to China. Microsoft is unlikely to pursue the app due to its focus on AI projects, including a significant investment in OpenAI. Walmart was only a partial bidder and is probably not looking to make a bid on its own. It is also doubtful that Triller would be able to make a bid.

Last month, there were reports that former Treasury Secretary Steven Mnuchin was assembling an investor group to bid for the app. Additionally, former Activision CEO Bobby Kotick has shown interest in acquiring the app.

A key provision in the sale of TikTok would involve including its algorithm code. However, ByteDance, the current owner, may be hesitant to include it in the sale. This is because China's cybersecurity rules have restrictions that may prevent the sale of the algorithm code.

TikTok's algorithm is considered its secret weapon. If the algorithm is not included in the sale, the asking price for TikTok will likely decrease significantly. Additionally, the number of potential buyers interested in acquiring TikTok will also decrease.

Will other nations now also look to ban the app?

This is a major concern for TikTok, that other nations will now also follow the U.S. lead, and implement similar rulings.

If TikTok is sold to a U.S. company, most Western nations would likely be fine with their user data being stored in the U.S., like with other social apps. However, EU officials are advocating for European user data to remain in Europe.

The bans of TikTok on government devices in Western nations have set a precedent over the past few years. When one nation imposes restrictions, others tend to follow suit. This is because they are all following the same cybersecurity advice. This trend could mean that more nations might also impose restrictions on TikTok unless it clearly separates itself from its Chinese origins.

Essentially, this could end up being a domino effect, which will see TikTok face more bans, in more regions, as a result.

Should we reduce our focus on TikTok?

It's difficult to say for sure what will happen with TikTok, as there is talk of a potential ban. However, given the significant financial interests involved, it is likely that some sort of agreement will be reached to allow the app to continue operating in the U.S.

It's always a good idea to have a diverse digital strategy in place. This situation once again emphasizes the importance of not relying solely on one platform. While it may not be necessary to completely abandon TikTok at this point, it's a good idea to start thinking about how you can make use of other platforms alongside it.

Instagram Reels and YouTube Shorts are the top contenders to benefit from TikTok's absence. They are similar in style and offer great options for reposting content and growing your online presence. Another platform to think about is Snapchat Spotlight, especially if it aligns well with your target audience.

It's always a good idea to explore other options, regardless of the situation. So, considering alternatives is a smart move to keep your online presence strong.

The TikTok divestment push is ongoing, and it seems like there will be more developments ahead. It's possible that this could lead to increased tension between the U.S. and China as they both vie for control over the app.

Which is amazing to consider. At the core of diplomatic relations between two global superpowers is an app that’s primarily focused on light-hearted dance clips.

Wild times.

Editor's P/S:

The TikTok sell-off bill signed into law by President Biden has sparked a flurry of questions and concerns. TikTok's legal challenge against the bill, citing its unconstitutionality, seems like an uphill battle, with the government likely to argue national security concerns. Despite the 270-day deadline for TikTok to divest, the Chinese government's resistance and the complexities of including the algorithm code in the sale make a successful outcome uncertain.

The article also highlights the potential impact on TikTok's global presence. While a sale to a U.S. company may appease Western nations, the possibility of a domino effect of bans in other regions remains a concern. The article suggests diversifying digital strategies and exploring alternative platforms like Instagram Reels and YouTube Shorts to mitigate the potential loss of TikTok. Overall, the situation underscores the complex geopolitical dynamics surrounding technology and data privacy, with TikTok becoming a flashpoint in the ongoing tensions between the U.S. and China.