Can TikTok Survive in US?

TikTok's in deep trouble. With countries like India and parts of Europe already banning the app over national security and data privacy concerns, the U.S. is facing the same dilemma. A federal appeals court just greenlit a law that could force ByteDance to sell its U.S. operations by January 19 or face a full ban. With 170 million U.S. users, that’s a lot of potential chaos. But the big question is: should the U.S. go all-in on banning the app, or can it find a middle ground to balance security and free speech? This is a battle that could change how nations handle tech giants and data privacy for good. Buckle up, this ride’s just getting started.

Fighting the Ban

It’s no surprise TikTok isn’t backing down. The company has already said it plans to take this all the way to the Supreme Court. Why? Well, the court decision has sparked one hell of a debate about national security. The U.S. government claims China could use TikTok to gather personal data on Americans and even manipulate content to sway public opinion. That’s a pretty big accusation, and the court isn’t buying TikTok’s assurances that its operations in the U.S. are independent of Chinese influence.

Recently, TikTok filed an emergency motion with the Supreme Court to delay the ban’s enforcement, hoping to buy time while its appeal is heard. If the ban is enacted, small businesses could lose $1 billion in revenue, and creators could face $300 million in monthly losses, underscoring the economic stakes tied to the app’s survival. This case has bipartisan support from Congress and has been part of a broader push to curb China’s growing influence on the American tech scene. Attorney General Merrick Garland called the decision "an important step in blocking the Chinese government from weaponizing TikTok."

TikTok’s Growth and Regulatory Hurdles

TikTok’s rise has been nothing short of explosive. With 170 million U.S. users by 2023, it's become a dominant force in social media, bringing in $11 billion in ad revenue in the U.S. alone. But its success hasn’t come without controversy. The app’s Chinese ownership has raised major concerns over data privacy and national security. In 2020, President Trump tried to ban it, citing these risks, and with Trump returning as President, the pressure is on for a decision. TikTok’s data privacy issues also pose serious risks to professionals, including CPAs, who handle sensitive client data. The potential misuse of this information, including identity theft and financial fraud, highlights the urgent need for stronger data protection practices. Adding to this, TikTok’s legal fight is expected to land in the Supreme Court, where Trump-appointed justices could play a pivotal role.

TikTok’s Market Size and Future Challenges

If TikTok gets kicked out of the U.S., it’ll flip the digital ad world on its head. With TikTok leading the charge for short-form video ads, competitors like Meta and YouTube will pounce. Creators, who depend on TikTok’s algorithm to stay visible, will also be hit hard. And ByteDance, with a $268 billion valuation in late 2023, is likely to take a major hit if TikTok is banned. Investors like Sequoia Capital and KKR won’t be happy either.

For Jeff Yass, a TikTok ban could be disastrous. Analyst Dan Ives called it a “nightmare scenario,” given Susquehanna’s heavy investment in ByteDance. Even if ByteDance manages to sell TikTok’s U.S. operations, retaining user trust under new ownership could be challenging, leaving the short-video space wide open for competitors like Meta and YouTube.

The Billionaire Behind TikTok’s Survival Bid

Here’s a plot twist: billionaire Jeff Yass, co-founder of Susquehanna International Group, owns 7% of ByteDance, with his firm holding another 15%. That’s a hefty chunk of TikTok’s parent company. But Yass isn’t just a big investor—he’s also a political heavyweight, pouring over $96 million into Republican campaigns. His ties to Trump are raising eyebrows, especially since Trump recently flip-flopped on TikTok.

Remember when Trump tried to ban TikTok in 2020? Now he’s defending it, calling out Meta on Truth Social: “If you get rid of TikTok, Facebook and Zuckerschmuck will double their business. I don’t want Facebook, who cheated in the last Election, doing better. They are a true Enemy of the People!” Yass’s influence and Trump’s shifting stance add even more drama to TikTok’s fight for survival.

The Countdown Begins

For TikTok, the clock’s ticking. ByteDance has just over a month to secure a sale or face the banhammer. But even if they manage to pull off a deal, there’s no telling how the broader landscape will shift. What’s certain is that the case will set a precedent for how the U.S. government handles foreign-owned tech apps in the future. The ruling is a reminder that the intersection of national security, free speech, and market influence can lead to huge disruptions. For now, TikTok is still fighting back, but how long it can stay afloat remains to be seen. Stay in the loop on the latest insights; subscribe to our weekly MYCPE ONE Insights newsletter and don’t miss a beat!