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TikTok is on the clock\u2014and it seems that the party will, in fact, stop.<\/p>\n
After years of bipartisan efforts to ban the short-form video platform in the United States, the Supreme Court today ruled unanimously in favor of a federal law requiring China-based ByteDance to divest its ownership of the social media platform or see the platform banned in the US.<\/p>\n
The Friday morning ruling followed last month\u2019s federal appeals court ruling upholding the divest-or-ban law passed by Congress last year. The ban, which will put companies like Apple and Google at risk of penalties if they continue to offer the app in their app stores, is set to go into effect on Sunday, January 19, the day before President-elect Trump\u2019s second inauguration.<\/p>\n
\u201cThere is no doubt that, for more than 170 million Americans, TikTok offers a distinctive and expansive outlet for expression, means of engagement, and source of community,\u201d read the Supreme Court\u2019s opinion. \u201cBut Congress has determined that divestiture is necessary to address its well-supported national security concerns regarding TikTok\u2019s data collection practices and relationship with a foreign adversary.\u201d<\/p>\n
In a brief filed late last month, Trump urged the Supreme Court to prevent the ban from going into effect so that he could \u201cresolve the issues at hand through political means once he takes office.\u201d The brief marked something of a 180 from 2020, when Trump tried to ban TikTok via executive action and was stopped by the federal courts.<\/p>\n
Ahead of the Friday decision, TikTok said that it planned to shut down the app in the US on January 19. Perhaps confusingly, though, the company has also said its 19,000 US employees will remain employed.<\/p>\n
The divest-or-ban law\u2014officially named the Protecting Americans from Foreign Adversary Controlled Applications Act\u2014gives the president the authority to grant a 90-day extension if TikTok\u2019s parent company, ByteDance, has shown \u201csignificant progress\u201d toward divestiture. The incoming Trump administration has said it intends to use the extension to pursue a deal, and Trump has also floated the idea of using an executive order to stop the ban from going into effect. TikTok CEO Shou Chew is one of several tech executives expected to attend Trump\u2019s inauguration on Monday.<\/p>\n
ByteDance has so far refused to sell the app, but there are reportedly some interested buyers.<\/p>\n
The People\u2019s Bid for TikTok, a group backed by Kevin O\u2019Leary of Shark Tank<\/em> and former LA Dodgers owner Frank McCourt, reportedly made an offer to buy for an undisclosed sum earlier this month. Chinese officials were also reportedly considering a sale of TikTok\u2019s US operations to Elon Musk, according to Bloomberg, but TikTok has since called the news \u201cpure fiction.\u201d The Chinese government, which must approve any sale of TikTok, has indicated that it would block any sale that included TikTok\u2019s algorithm.<\/p>\n Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides.<\/p>\n<\/div>\n<\/div>\n Without a sale, Trump could potentially ask the Justice Department to not enforce the law or encourage Congress to repeal it.<\/p>\n TikTok has given assurances to advertisers that refunds will be issued for any future ad dollars spent, though some marketers have expressed concerns about the arrangement due to the lack of contractual backing on those promises.<\/p>\n According to eMarketer, Meta stands to capture nearly 40% of reallocated ad spend from TikTok across Instagram and Facebook, though some TikTok creators have expressed reluctance about moving over to Meta platforms.<\/p>\n TikTok users (and social media managers, it seems) have downloaded the Chinese app Xiaohongshu (also known as RedNote) as a way to send a message of resistance to the US government, but creators have told Marketing Brew that they don\u2019t necessarily see the platform as a long-term replacement for TikTok. Beyond Instagram, Facebook, and YouTube, TikTok users have discussed other emerging video platforms like Neptune as potential alternatives, though it\u2019s still in beta testing.<\/p>\n The downstream effects of the ban on industries that have leveraged TikTok to drive awareness and sales, though, remains unknown. TikTok creator Maddy Mitchell, who has been outspoken about those potential effects, told us that, to her, the ban indicates that lawmakers are out of touch.<\/p>\n \u201cThey have no idea all of the ways that TikTok drives the economy,\u201d she said. \u201cI can\u2019t tell you how many times I\u2019ve gone to Target to try and buy something that I saw on TikTok and it\u2019s been sold out\u2026There are musicians that have fully gained a platform and have massive audiences now because of TikTok. There are movies and TV shows that I never would have discovered if it weren\u2019t for TikTok. Barnes & Noble now has an entire section called BookTok, where it displays all of the books that are most popular on TikTok.\u201d<\/p>\n<\/div>\nGet marketing news you’ll actually want to read<\/h5>\n
What does this mean for marketers?<\/h2>\n