TikTok’s future in the US is heading toward its moment of truth.
The US House of Representatives passed legislation on April 20 that would force the social media platform’s Chinese parent, ByteDance Ltd., to divest its controversial ownership stake or face a US ban. The Senate is expected to vote on the bill in the coming days, and President Joe Biden has said he’d sign the legislation promptly.
If the bipartisan measure becomes law, it would give ByteDance as long as a year to divest its ownership before a ban would set in. Speaker Mike Johnson included the TikTok divestiture legislation — already passed overwhelmingly by the House in a stand-alone bill — in a fast-moving aid package for Ukraine and Israel.
TikTok said it was planning a lawsuit over the measure. “This is an unprecedented deal worked out between the Republican Speaker and President Biden,” Michael Beckerman, TikTok’s head of public policy for the Americas, said in a memo to TikTok’s US staff. “At the stage that the bill is signed, we will move to the courts for a legal challenge.”
The concern among lawmakers is that TikTok poses a security threat to US users because China requires its companies, upon request, to share any national security-related data with the government. There are fears that the Chinese government could abuse the data of TikTok’s users, for example by developing profiles of them and subjecting them to blackmail, and that it could influence the content American users see on the app. TikTok has pushed back vehemently on these concerns and spent more than $2 billion in a project it says cordons off US users’ data.
So what could happen next? And who stands to benefit from a potential TikTok divestiture? Here are some of the biggest questions about the popular video app’s future in the event the bill becomes law.
Would ByteDance actually sell TikTok?
A demand that ByteDance sell its incredibly valuable (and growing) business would get tremendous pushback. ByteDance doesn’t want to sell TikTok and will do everything in its power to avoid such a scenario, including fighting it in US courts. The Chinese government would also need to approve any divestiture plan and has said publicly that it would oppose a forced sale. It’s conceivable US lawmakers could be placated by something short of a full sale; possibly TikTok could become its own individual entity headquartered in the US, with ByteDance remaining an investor.
Complicating matters further is that former President Donald Trump, the presumptive Republican nominee for president, has said he is against a sale, reversing the stance he took when he was in office. Trump’s opposition could play a factor if he ends up winning the election before a sale process is finalized.
Who would buy TikTok?
Anyone buying the company would need a very fat pocketbook. ByteDance, which is privately traded, has an estimated valuation of around $268 billion, and while TikTok’s US business would certainly be much smaller, it could still fetch a price of around $40 billion to $50 billion. For comparison, Elon Musk paid $44 billion for X, the social media platform formerly known as Twitter, in 2022.
A price tag that high eliminates most potential buyers right out of the gate. Meta Platforms Inc. and Alphabet Inc. might seem like logical acquirers, but they are mired in regulatory concerns over monopolization, which would essentially rule them out. Oracle Corp. is often seen as a likely landing spot as the enterprise software company is already a TikTok partner in the US. It houses the app’s US user data and considered a bid for it in 2020 when then-President Trump tried to force a sale. However, Oracle’s more than $87 billion in debt, including from another large acquisition in 2022, makes it unlikely the company could afford TikTok on its own. Microsoft Corp. was one of the other leading candidates to buy TikTok’s US business in 2020, but that deal ultimately fell apart. Former Treasury Secretary Steven Mnuchin said, without giving specifics, that he’s assembling a group of investors to purchase TikTok’s US operation, calling it a “great business” in an interview with CNBC.
Could TikTok survive without the US market if it’s ultimately banned?
Possibly. On its website, TikTok boasts that it is the number one downloaded app in more than 40 different countries. Even though the US is a very big audience — more than 170 million monthly users — that’s still a fraction of the billion-plus total TikTok users. ByteDance already operates a TikTok clone in China, called Douyin, with hundreds of millions of followers.
Still, as other platforms have learned, the US is the most valuable market for social networks because of the prevalence of large advertisers willing to pay to reach US audiences. And ceding the US to a competitor would put the rest of TikTok’s global markets at risk, as there would be a real concern that the network effects in the US could lure people away from TikTok to other US-focused alternatives.
A ban would also likely kill TikTok’s big ambition to expand the US version of TikTok Shop, which combines online entertainment with impulse buying. The company predicts that business could grow tenfold in 2024.
Who stands to benefit from a TikTok divestiture?
The most obvious answer here is Meta, which owns Instagram, an app that is already incredibly popular and features a TikTok rival product known as Reels. If TikTok was sold to another company and mishandled, or banned for any significant amount of time while the logistics of a divestiture were worked out, Reels would be the most obvious alternative for US users. Trump said he now opposed forcing TikTok’s sale because it would benefit Meta, which suspended him from its platforms for two years in January 2021 after concluding that some of his posts encouraged his supporters to violently riot at the US Capitol.
It’s possible other video-focused services could also benefit, including YouTube, which is owned by Alphabet. In addition to gaining users, Meta and YouTube would likely capture advertising dollars from TikTok if the app is no longer able to operate. The value of both Meta and Alphabet shares leaped upward after the divestiture bill passed the House of Representatives. X could also see an uptick in users and advertising if TikTok disappears or struggles.
What are the politics involved?
The US debate over TikTok’s future promises to get messier with the general election approaching. Trump’s flip-flop on what to do about TikTok has complicated matters for Republicans. They were traditionally in favor of a ban and now need to decide whether to move forward despite their presidential candidate’s change of heart. One wealthy Republican donor, venture capitalist Keith Rabois, posted on X that he will “never fund” any Republican candidates who vote against the bill. At the same time, voting for the bill could hurt some politicians with young voters who love the app and will be very upset if it’s banned.
Then, of course, there’s China’s reaction to consider. It’s unclear how the Chinese government would respond to a forced sale, but US-China trade and diplomatic relations would likely be affected. When the Trump administration pressed for TikTok’s sale years ago, China’s foreign ministry said that the precedent of acquiring a company under the pretense of protecting national security could lead to foreign countries targeting American companies, calling it the opening of a “Pandora’s box.”
American officials have been warning for years about the risks of TikTok, but it’s been mostly talk and little action.
This week, though, a new law will likely give the United States government the authority to try to ban one of the most popular apps in the country. (The key word is “try.”)
Is this it for TikTok and those of you who use the social app? Should you delete it and walk away from your communities or livelihood on TikTok? Read on.
Is TikTok really going to be banned?
Not yet.
Congress passed legislation on Tuesday that’s an ultimatum to TikTok’s owner, the Chinese technology giant ByteDance: Sell to a company that isn’t Chinese within about a year or face a ban on the app in the United States.
President Biden issued a statement minutes after the Senate vote saying he plans to sign the bill into law on Wednesday. Even if he does, TikTok is likely to challenge the new law in court.
Legal experts have said a potential ban as it’s written may violate Americans’ First Amendment rights by outlawing an app they use for free expression. The legal experts also cautioned the government may be overstepping the Constitution by targeting a single company it dislikes. Previous attempts to ban Chinese apps including TikTok have stalled in court.
Any ban on TikTok in the United States, then, wouldn’t happen for many months. But this is the closest the United States has come to kicking out an app used by an estimated 170 million Americans.
When would TikTok be gone?
The latest version of the legislation gives TikTok 270 days — about nine months — to sell to another company, with provisions for additional 90-day extensions if “significant progress” is being made to sell TikTok. During that time, the app would likely continue to operate as normal in the United States.
The 270 days mean that TikTok would keep working well past the November presidential election. The timeline in the original House bill was only 180 days, which could have shut the app down a month ahead of the election.
Lawsuits could extend the proposed timeline or dump a ban entirely. Or TikTok could sell the app instead but …
Could TikTok find a new owner in time?
The odds may not be great.
China’s government has previously said it would strongly oppose a forced sale of the app.
And a purchase of TikTok would likely cost tens of billions of dollars. Few people or companies have that kind of money — and companies that do such as Meta or Google probably won’t try to buy TikTok because antitrust regulators are unlikely to allow it.
The likeliest outcome, then, may be an attempted government ban of TikTok, and almost certainly, courts will have to decide whether a ban violates Americans’ constitutional rights.
Why do they want to ban TikTok?
Many U.S. government officials worry that China’s government can force TikTok to hand over data from Americans’ smartphones or manipulate the videos people see on TikTok toward the preferences of the Chinese Communist Party.
Those concerns are largely hypothetical. U.S. officials haven’t made public evidence that TikTok has been systematically manipulated by China’s government.
But those officials say the only surefire way to remove the national security risk is to force ByteDance to sell the U.S. version of TikTok to a non-Chinese owner or kick the app out of the United States entirely.
The officials who worry about TikTok also say it’s a unique risk to America’s national security. The app is used by roughly half of Americans and it functions like a nationwide, TikTok-programmed television channel that could influence American’s views about elections or the Israel-Gaza war.
Legislators have also grilled TikTok’s CEO and other executives over the spread of child sexual abuse material through their apps and the potential harm to children’s mental health from social media use. Those concerns are not specific to TikTok.
How can I save my TikTok data?
For now, your experience should remain the same on the app, but you can start planning for a potential shutdown. See if your favorite creators also post on other apps and follow them there as well.
If you post to TikTok, make sure your videos are backed up by going to your profile → Settings and privacy → Account → Download your data.
What are the alternatives to TikTok?
TikTok clones are everywhere.
YouTube has YouTube Shorts and Instagram’s Reels also are a constant feed of short vertical videos tailored to your tastes. Snapchat has Spotlight, in the same vein.
If TikTok is actually removed from app stores in the United States, we’ll likely see more companies trying to come up with alternatives. That’s what happened after Elon Musk bought Twitter.
What does this mean for creators on the app?
If TikTok goes away, some individual creators and small business owners will face a threat to their livelihoods, they’ve said — more than 7 million U.S. businesses sell products on TikTok, according to the company.
TikTok didn’t immediately respond to questions about creators’ businesses in the wake of a ban, including how long paid ads would continue to run and what would happen to CapCut, the ByteDance-owned video editing app. There is currently no way for creators to port their followers to another app.
How can I protect myself on TikTok?
As for the concerns being voiced by lawmakers, you should decide for yourself on your personal risk tolerance when it comes to TikTok.
If you’re uneasy about watching or posting on TikTok, the safest step is not to download or use the app at all. But even if you or your child likes using TikTok, it’s worth considering changes to keep your information more private from the company and other people on the app.
– Don’t share your contacts with TikTok. The app will repeatedly ask for permission to access the contacts on your phone or link to your Facebook account. That data can reveal more than you expect about you or your friends. Read more here on how to check your current TikTok settings or change them.
— Set up a new and more anonymous TikTok account. Create an email address that you only use for your TikTok account.
— Block TikTok from collecting information on what you do outside of its app. On iPhones and Android devices, say no when the app asks for permission to track you or, even better, adjust the setting so no apps can do so.
— Watch TikTok videos on a web browser instead of in the app. You won’t get a personalized feed of videos or be able to follow specific accounts but you can just watch individual TikTok videos on the web without downloading the app at all.
— For parents, TikTok has a feature to link their accounts with a teen’s. You can control settings including daily time limits for the app and who can comment on your teen’s videos.
As a TikTok divestment law races to passage, TikTok's parent company ByteDance must reckon with the legislation across all of its apps, many of which are growing rapidly in the U.S.
The broad language included in the bipartisan TikTok ban bill could make it impossible for most ByteDance apps to operate in the U.S. unless the Chinese firm sells them to U.S. companies.
The bill only directly names ByteDance and TikTok, but its reach is much broader.
- It restricts any app that is "operated, directly or indirectly (including through a parent company, subsidiary, or affiliate)," owned or controlled by a company based within the borders of a foreign adversary.
- Therefore, a sale would be required for any app controlled by a foreign adversary, including China, per the text from the current version of the bill being considered by the Senate.
ByteDance offers an array of apps in U.S. app stores in addition to TikTok, including its popular video editing app CapCut and photo editing app Hypic.
- ByteDance also provides several other apps in U.S. app stores via umbrella developer companies. These include the AI homework app Gauth and a Pinterest-like social network called Lemon8,
- SoundOn, under TikTok, allows artists to distribute music on the app and streaming services while maintaining ownership and receiving royalties.
ByteDance has introduced products across several industries, including e-commerce and AI, aimed at consumers and business users alike.
- Its productivity suite, Lark, is akin to Microsoft Office or Google Workspace. BytePlus offers cloud, SMS and software services.
- On the entertainment front, 8th Note Press is ByteDance's venture into publishing, and the company launched a team to create an English-language mini-series.
- ByteDance also has an array of products in markets outside the U.S., including the news aggregation app Toutiao, the Chinese video-sharing platform Xigua Video, and Douyin, China's version of TikTok.
It's unclear how lawmakers plan to address other apps offered in U.S. app stores with owners based in foreign adversaries of the U.S. as defined in the bill.
- More than one quarter (26) of the 100 most downloaded apps in the U.S. so far this year are owned by foreign companies, according to data from Apptopia.
- The bill's sponsors in the House have been adamant that the law is meant to target any "applications and websites controlled by a foreign adversary— China, Russia, Iran, North Korea —that pose a clear national security threat," and not just TikTok.
- Keeping the law broad could strengthen the U.S. government's case in a likely challenge of its constitutionality. If the law is seen as specifically targeting ByteDance, the company could have grounds for appeal under the Constitution's ban on bills of attainder.
- TikTok also argues that the bill infringes on its customers' First Amendment rights. Supporters of the bill maintain that it's about protecting national security.
The bill specifies that it doesn't apply to apps that primarily provide product reviews and retail sales, Congressional aides told reporters on a press call in March. That would exempt popular Chinese-owned apps like Shein and Temu.
- TikTok did not respond to Axios' requests for comment.
The Senate is expected to pass its version of the bill this week, and President Biden has indicated he would sign the measure, setting ByteDance up for an intense legal fight to keep TikTok and other apps in U.S. app stores.