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TikTok digs in to fight US ban with 170 million users at stake

Zheping Huang, Sarah Zheng, Bloomberg News on

Published in Business News

That year, ByteDance’s revenue more than doubled to about $35 billion, a chunk of which stemmed from its U.S. arm. That’s about when TikTok challenged the Trump ban in court, winning a temporary reprieve from a judge who ruled the White House may have overstepped.

The issue began to fade from the public consciousness. The idea of banning TikTok only resurfaced around 2023, when Biden began confronting China in a number of areas.

The crux of the situation is Tiktok’s future in the U.S. Handing the service over to a local competitor means ByteDance gets shut out. Abandoning ship raises the prospect of a return at some stage, perhaps during a friendlier administration.

“A ban would be the better option of the two. If you shutter the U.S. business, there’s always a chance you could win back the market, despite how difficult that is,” said Ke Yan, a Singapore-based analyst with DZT Research. “The divestment is much more complicated since it involves technology transfers.”

The solution now likely lies with the courts — though that too comes with its own risks.

 

A protracted legal fight could surface information both sides may prefer remain private. It threatens to tie up and distract TikTok, giving its rivals an opening to poach users. Corporate sponsors may drop off if exchanges turn nasty. And influencers, ever on the hunt for the next shiny object, may gravitate toward less turbulent platforms.

It remains unclear how a ban might work. Simply getting Apple Inc. and Google to remove the app from stores may not be enough, since users who’ve downloaded the software can stay engaged. The bill makes it clear that hosting the service will be illegal — suggesting a direct impact on usage.

“At the end of the day, ByteDance may be forced to choose to leave the U.S. market,” said Wei Zongyou, a professor on American security and foreign policy at Fudan University.


©2024 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

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