Will TikTok cave in or face a US ban?

Essence

Uncertain future. TikTok faces a US ban unless it separates from its Chinese parent company ByteDance by January.
Privacy Concerns. US lawmakers fear access to data by the Chinese government, raising concerns about data privacy and national security.
Impact on influences. A possible ban would significantly affect influencers and brands that rely on TikTok for audience engagement.
Competitors can win. Instagram and YouTube will benefit the most if TikTok exits the US market.

No business, let alone social media platforms, has a shadow of business death looming over it as big as that of TikTok.

Earlier this year, the US Congress passed a bill effectively forces TikTok to restructure its US operations. By January, TikTok must divest itself from its owner ByteDance because it is based in China. If not, TikTok will be removed from app stores available in the US market, ending its operation in the US.

I covered the story in two posts, the first when bill against TikTok was also considered after the TikTok invoice was signed into law.

An appeals court in Washington DC is hearing TikTok’s arguments to challenge the law. So far, experts agree that TikTok is facing an uphill battle, despite the 150 million Americans who use TikTok regularly.

The central debate in the TikTok appeal

The law arose out of Congressional concerns about data privacy when it comes to social media giant. Congress passed the law believing that the data of US TikTok users could be accessed by the Chinese government at will and then exploited through messaging campaigns.

US lawyers argue that TikTok’s algorithm is ultimately owned by ByteDance. US lawyers argue that there is no separation, meaning the technology, while benign in itself, is still subject to response to Chinese government intervention. In short, the Chinese government can ask ByteDance for TikTok data without any federal intervention, and the Chinese government can access that algorithm to insert propaganda campaigns.

TikTok: We do not share with the Chinese government

Instead, TikTok’s legal defense reinforces claims by TikTok executives, as well as those at ByteDance, that there are no ties to the Chinese government and that invasive data mining or propaganda messages are unlikely. The use of the platform in TikTok’s US operations is a level of communication that differs from the platform’s algorithm and is independent of ByteDance. This layer defines TikTok operations, such as community moderation, as separate from the algorithm.

TikTok’s legal defense noted in its opening argument that engagement at that community level is legally subject to expressions of free speech and that the law prevents those expressions.

Influencers state their case: TikTok’s social media revenue stream

Continuing to argue against the law, TikTok influencers appeared at the hearing with their own legal representation, explaining how the law would severely affect their business. They explained that they and their followers will not be able to easily move to another platform. A ban would force influencers “out of business” and have consequences for brands that rely on them.

The case raises the question of what protections speech has when associated with an algorithm. A debate about freedom of speech may appear to be purely an academic topic, but such debates often fade into marketing concerns about managing customer experience online because so much online expression of a product, service or brand involves social media platforms.

Recent news on a separate two-year investigation of TikTok also hindered the image of the platform. NPR reported that the investigation uncovered internal documents that indicated executives knew their algorithm was potentially dependent on teenagers. Such decisions give the impression that managing a separate level of communication is problematic, while the investigation led to a state lawsuit against TikTok for allegedly misleading the public about the risk of addiction. While the safety suit is a separate issue, the claims may cast a negative light on TikTok in its appeal hearing.

Which platforms will benefit if TikTok leaves the market?

The platforms that will benefit the most are those that share videos easily. Two platforms are driving this potential benefit: Instagram, which has geared its image-sharing platform toward video, and YouTube, considered a video staple for a variety of users, from lone podcasters to entertainment media.

There were a few lesser-known direct competitors to TikTok, but many have been shut down as of 2020. Byte, created by Vine co-founder Dom Hofmann, was bought by another TikTok competitor, Clash. Another, Dubsmash, was acquired by Reddit in 2020 and then shut down in 2022. This, combined with the current competition to attract influencers among the big social media platformsput Instagram and YouTube ahead.

Instagram and YouTube await the news

Instagram would be the best bet for TikTok users to pivot to, but not just because of its 2 billion active users. Instagram has strengthened its features to enhance the user experience in the feed, so influencers and brands have new ways to deepen engagement. It is also a complement to other platforms. Its user base has strengthened the launch of Threadsthe microblogging site that has steadily eroded X. Audio social app Clubhouse has also been a feed for Instagram, as their user profiles link to an IG profile. The possibility of Instagram absorbing a significant portion of TikTok’s user base is high.

Meanwhile, Google’s second search engine, YouTube, has seen a new lease of life since its introduction YouTube shortsits short-form video platform in 2020. Seen as a response to the growing popularity of short-form video content, YouTube Shorts increased engagement; many creators have embraced the Shorts format, using it alongside their regular longer-form content has helped increase engagement on the platform, especially among younger users. Shorts could still be adopted if TikTok is pulled from the US market.

Social audio apps like Clubhouse and Chattr could also benefit, despite offering a different format: live audio instead of video. These smaller platforms have been looking for massive growth in the same vein as Instagram and YouTube. So far, they’ve seen only modest audience growth.

But each’s users are focused on niche interests and have remained committed to prioritizing engagement over building coverage. Therefore, an opportunity to gather influencers who promote connection could still appeal TikTok influencers who need an alternative platform to deepen relationships if a TikTok shutdown occurs.

However, these social audio platforms face stiff competition of their own through LinkedIn Events and X Spaces. Both are live audio hosting alternatives that can attract a larger audience due to higher user activity on both LinkedIn and X.

What’s next and what should marketers do?

The federal appeals court is expected to rule by December. If he decides against TikTok, then TikTok’s options become very narrow. TikTok may pursue a Supreme Court hearing, assuming the Supreme Court will hear the argument.

A decision in December will also limit the time available to find suitors for a TikTok buyout, given the January deadline. ByteDance has said it has no intention of selling TikTok.

Brands planning holiday campaigns using TikTok are safe, but marketers should monitor the outcome of the TikTok battle. It will influence the planning of 2025, either as a brand or through an influencer with a considerable number of TikTok followers.

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