TikTok May Be Banned in the United States of America As Court Upholds Legislation Forcing Sale

A panel of federal judges has this afternoon upheld a new law signed in April 2024 that required TikTok owner, the Chinese firm ByteDance to sell the popular app to a non-Chinese company by January 19 2025 failing which the app would be banned in the United States of America. The app has been cut in the crossfire of sanctions and geopolitical rivalry between China and America. Tik Tok is used by 170 million Americans, lawmakers have argued that Chinese secret services may use it to collect vital information on American users which may compromise national security.

Tik Tok A Behemoth Video App

ByteDance, the parent company of TikTok, is valued at around $300 billion. TikTok accounts for over half of the company’s total revenue-this implies that at least $100 billion valuation for the video app. TikTok generated about $16 billion in revenue in 2023, mainly from advertising.

ByteDance Argued that Chinese Government will Block Sale

In trying to prevent the forced sale of its American unit, ByteDance argued that the Chinese government will not approve the sale. It has strenuously denied operational ties to the Chinese government and the possibility of Chinese government agencies accessing users’ data.

The Chinese government holds a minority stake in ByteDance, the parent company of TikTok, through a 1% “golden share”. The “golden share” structure allows the Chinese government a seat on the subsidiary’s board of directors and influence over strategic decisions concerning content and data policies. This has raised difficulties for ByteDance in its court case despite arguments that banning TikTok in America would infringe on the first amendments rights of Chinese users. American content creators whose income is tied to distributing content on TikTok have aligned with the argument that banning Tik-Tok infringes on the right to free speech.

Donald Trump is a Tik-Tok Supporter

Newly re-elected American president Donald Trump has spoken against the ban on TikTok. He has been a supported of technology innovations and the companies behind them but it remains if this support would extend to rolling back a law to ban TikTok on national security grounds. He may not want to be seen as weak on China, a country he has vowed to slap 60% import tariffs on.

 

 

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