The U.S. House of Representatives recently passed a bill to force TikTok’s Chinese owner ByteDance to divest, surprising people from Washington, D.C. to Beijing. The bill still requires Senate approval and President Joe Biden’s signature to become law. If enacted, ByteDance would have six months to arrange the sale of TikTok’s U.S. operations or face removal from app stores and blocking by internet service providers in the United States.
Many of TikTok’s users, who engage with a wide array of content on the platform, were shocked at the possibility of losing access to the app. TikTok boasts 170 million American users, a significant number that could impact many Americans if the app were to be banned. Politicians are facing the challenge of potentially taking away a popular platform from their constituents, which could impact their reelection chances.
The potential fallout of a TikTok ban extends to various aspects like the influencer economy, investors, potential bidders in a sale, and the U.S. capital markets. The influencer economy, driven by TikTok’s algorithm, supports thousands of jobs and businesses in the U.S. Investors in ByteDance, including international institutions and Chinese authorities, could be affected by a forced divestiture. Potential bidders, like former Treasury Secretary Steve Mnuchin, are eyeing a valuable digital asset at a discounted price.
The impact on the U.S. capital markets could be significant if a TikTok ban were to occur. Companies like Shein, another Chinese company with plans to list in the U.S., are already considering relocating their IPOs due to regulatory challenges and calls to block their listing. Big winners of a TikTok ban could include Big Tech companies like Meta and Google, as they stand to gain ad revenues and user engagement lost by TikTok. Additionally, Big Law professionals and parents looking to reduce screen time for their children could benefit from the ban.
The ban on TikTok in the U.S. could lead to a reshuffling of the digital landscape and create opportunities and challenges for various stakeholders. As the legislative process unfolds, it remains to be seen how the situation will impact users, businesses, and the overall tech industry. The outcome of the TikTok divestiture could set a precedent for how the U.S. government addresses national security concerns related to foreign-owned technology platforms in the future.
