TikTok Ban – What Does it Mean

There are a lot of people with a lot of opinions about this. Here are mine. In no particular order.

First, if you assume that TikTok makes a buck per user per month off selling your data, if they just invest One month’s revenue – $170 million – they can outspend everyone else as they attempt to strike down the law. If they were willing to spend, say, 6 month’s revenue, that is basically a billion plus. You can buy a lot of lawyers and ads for that.

This is an election year. There are some people pretty unhappy right now. They are telling their politicians that they are going to vote for “anyone but you” in November. If that movement gains steam, well, who knows.

Might ByteDance decide to sell? It is possible. But China has a law that allows the government to stop the technology transfer of national importance out of China. What good is buying the company if you don’t get the software?

China has already banned a number of U.S. companies. This move by Congress legitimizes those efforts and may cause them to react. For example, If Apple doesn’t sell its iPhone product line to a Chinese company, iPhones will be banned in China. Will other countries ban other things now that the U.S. has legalized the concept? Any item that any country thinks is important to them is fair game.

Will this stop China’s activities? No. They will buy ads and data and publish content on other social media platforms – like they do today except on steroids. Or maybe just steal it.

Who benefits from this sale, if it happens? The primary beneficiaries will be Google (YouTube), Meta (Facebook and Instagram) and Twitter. The same companies that at least some people in Congress (primarily conservatives) hate. So why are they giving their enemies a $10+ billion a year gift? Not clear.

Zuckerberg and Musk have been trying to copy ByteDance’s secret sauce to capture eyeballs. They have basically failed. Having Congress fix that problem is a pretty nice gift. All we have to do is look to India’s TikTok ban to see where the money goes. Hint: Meta and YouTube.

It also sends a message to every other country that if you want to give your own companies an advantage, ban U.S. companies from doing business in your country. Maybe our close friends won’t do that, but others likely will.

U.S. companies will need to understand what their responsibilities and liabilities will be if the ban goes into effect. Will any given company have to block traffic, for example. If you currently use TikTok to reach some of those 170 million users and that market goes away, what is your strategy?

There is still a lot that we don’t know about how this is going to roll out so, as long as you are not one of those people whose income depends on TikTok, get out your popcorn and a couple of beers and watch how this plays out.

By the way, there are plenty of people in Congress – including those running for reelection – who use and buy ads on – you guessed it – TikTok.

Credit: CyberNews and The Register and Washington Post

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