TikTok, the immensely popular short-video platform, faces an uncertain future in the United States. With more than 170 million American users, the app has become a cultural phenomenon, revolutionising content consumption and social media interaction. However, a recent US appeals court ruling has heightened the possibility of TikTok being banned unless its Chinese parent company, ByteDance, divests its ownership.
This development raises significant questions about TikTok’s future, potential buyers, and the app’s impact on millions of creators, businesses, and users.
The Court Ruling and Its Implications
On Friday, a federal appeals court upheld a law requiring ByteDance to divest TikTok’s US operations or face a ban starting January 19, 2025. This ruling aligns with longstanding concerns over national security, with critics alleging that TikTok’s ties to China could make US user data vulnerable. The law not only places TikTok’s future in jeopardy but also threatens to penalise app stores, such as Apple and Google, with significant fines if they continue hosting the app post-deadline.
For existing TikTok users, the scenario is equally troubling. While they may retain access to the app for a short time after a ban, they would no longer receive updates, leaving the platform prone to bugs and obsolescence.
Despite the ruling, TikTok isn’t giving up. The company plans to appeal to the Supreme Court, arguing that the law infringes on free speech rights. “The Supreme Court has an established historical record of protecting Americans’ right to free speech, and we expect they will do just that,” said TikTok spokesperson Michael Hughes. However, the legal battle presents significant hurdles, particularly given the court’s conservative composition and its potential inclination to prioritise national security over other considerations.
What Are TikTok’s Options?
TikTok’s primary strategy is to appeal the decision. If accepted, the Supreme Court could expedite the process to review the case before the January deadline. The company could also request a stay on the ruling, which would temporarily delay the enforcement of the law.
Legal experts, however, suggest that TikTok faces an uphill battle. The court’s conservative leaning and the emphasis on national security concerns make it challenging to overturn the ruling.
President Joe Biden has the authority to grant a 90-day extension to the deadline if he believes significant progress has been made toward compliance with the law. Alternatively, President-elect Donald Trump, who takes office just a day after the ban’s implementation, could intervene. Although Trump was an early advocate of banning TikTok, he recently stated that he would “never ban TikTok.” His administration could potentially offer TikTok a lifeline, either by not enforcing the law or by declaring ByteDance’s divestiture efforts sufficient.
ByteDance could comply with the divestiture requirement, selling TikTok’s US operations to a qualified buyer. However, this route is fraught with challenges, including the need for Chinese government approval, particularly concerning the export of TikTok’s valuable recommendation algorithm. Experts note that these complexities could significantly delay or derail a sale.
Who Are the Potential Buyers of TikTok US?
If ByteDance is forced to divest, several entities have shown interest in acquiring TikTok’s US operations. Here are some of the notable contenders:
1. Steve Mnuchin
Former US Treasury Secretary Steve Mnuchin has expressed interest in purchasing TikTok. Mnuchin, an investment banker and film producer, revealed plans to assemble a consortium to bid for the platform. While his track record lends credibility to his ambitions, the specifics of his proposal remain unclear.
2. Big Tech Players
Tech giants like Meta and Google have the financial capacity to purchase TikTok. However, concerns over antitrust scrutiny and regulatory hurdles make their involvement unlikely. Analysts predict that these companies stand to benefit indirectly if TikTok is banned, as its digital advertising revenue would likely shift to their platforms.
3. Kevin O’Leary
The Canadian entrepreneur and television personality, known for his role on Shark Tank, has publicly discussed his intention to make a bid for TikTok. O’Leary suggested an initial offer of $20 billion to $30 billion, significantly lower than TikTok’s estimated valuation. However, the offer might exclude TikTok’s algorithm, a key component of its success, making the deal less appealing to ByteDance.
4. Rumble
Rumble, a video-sharing platform, has openly declared its interest in acquiring TikTok. CEO Chris Pavlovski sent a letter to TikTok’s leadership earlier this year, expressing readiness to form a consortium for the purchase. Rumble’s offer highlights the growing interest of alternative video platforms in capturing TikTok’s user base.
5. Bobby Kotick
Former Activision Blizzard CEO Bobby Kotick is reportedly exploring opportunities to acquire TikTok. According to sources, Kotick has been seeking partners for a potential bid, though he has not publicly commented on the matter. His involvement could bring significant financial and strategic backing to any acquisition effort.
6. Oracle and Walmart
Oracle and Walmart were close to acquiring TikTok in 2020, under a deal that ultimately fell through during the Biden administration. While neither company has recently renewed its interest, their prior involvement positions them as potential bidders should TikTok go up for sale again.
7. Microsoft
Microsoft was also in talks to acquire TikTok in 2020 but withdrew after negotiations stalled. CEO Satya Nadella later expressed satisfaction with the decision, though Microsoft could revisit its interest given TikTok’s immense market potential.
While there are several interested buyers, executing a sale is easier said than done. ByteDance’s ownership of TikTok’s algorithm — a critical asset — complicates any divestiture. The Chinese government’s restrictions on technology exports could prevent ByteDance from transferring the algorithm to a new owner, diminishing the app’s appeal.
Additionally, potential buyers must navigate a complex regulatory landscape. The divestiture must satisfy US national security requirements and win approval from both US and Chinese authorities, making the process fraught with uncertainty.
For TikTok’s millions of users and creators, the app’s uncertain future is a cause for concern. Many rely on the platform for entertainment, connection, and income. Content creators, in particular, face significant challenges in transitioning their audiences to alternative platforms with different algorithms and monetisation structures. Others worry about losing a vital source of income and creative expression. However, some remain optimistic that TikTok’s popularity and economic impact will compel lawmakers to find a solution.
