Home | Newsletters & Shorts | DW Newsletter # 195 – Will TikTok get banned or divested in the USA?

DW Newsletter # 195 – Will TikTok get banned or divested in the USA?

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Dear readers,

TikTok is facing a pivotal moment in its turbulent journey this January. With the US Supreme Court leaning toward upholding a law requiring its owner ByteDance to sell TikTok’s US assets by 19 January 2025, the app stands on the brink of a nationwide ban. ByteDance, backed by the Chinese government, has fiercely resisted divestment, citing constitutional protections under the First Amendment. Adding to the complexity is Beijing’s ‘golden share’ in ByteDance; this control, paired with export regulations on software algorithms like TikTok’s recommendation engine, underscores China’s role in the negotiations and complicates the app’s future.

Amid these disputes, reports of Elon Musk, owner of X (formerly Twitter), have emerged as a potential buyer for TikTok’s US operations. Musk’s ties to US and Chinese markets via Tesla’s Shanghai production hub position him as a unique figure in this debate. If Musk were to acquire TikTok, it could bolster X’s advertising reach and data capabilities, aligning with his broader ambitions in AI and technology. However, such a sale would involve overcoming numerous hurdles, including ByteDance’s valuation of TikTok at US$40–50 billion and securing regulatory approvals from both Washington and Beijing. On the other hand, ByteDance, backed by Beijing, is resisting the sale, arguing that the conditioning violates free speech and poses significant logistical hurdles.

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TikTok has attempted to safeguard its US user base of 170 million by planning to allow users to download their data in case the ban takes effect. It has also reassured its 7,000 US employees that their jobs and benefits are secure, even if operations are halted. While new downloads would be prohibited under the ban, existing users could retain access temporarily, although the platform’s functionality would degrade over time.

The looming deadline has sparked a surge in alternative platforms, such as RedNote (known in China as Xiaohongshu), which has seen a significant influx of US users in anticipation of TikTok’s potential exit. These developments underscore the broader implications of TikTok’s struggles, including the reshaping of the social media landscape and the role of government intervention in regulating digital platforms.

What’s next?

The fate of TikTok in the US hangs in the balance as President-elect Donald Trump considers an executive order to delay the enforcement of the ‘ban or divest’ law by up to 90 days. The potential extension, supported by figures from both political sides, including Senate Majority Leader Chuck Schumer and Trump’s incoming national security adviser Mike Waltz, aims to provide ByteDance, TikTok’s Chinese owner, additional time to divest its US operations and avoid a nationwide ban. With over 170 million American users and substantial ad revenue at risk, lawmakers are increasingly wary of the disruption a ban could cause, signalling bipartisan support to keep the app operational while addressing national security concerns. TikTok CEO Shou Zi Chew’s attendance at Trump’s inauguration further hints at a shift in relations between the platform and the new administration. Meanwhile, the uncertainty has already driven US users to explore alternatives like RedNote as the clock ticks down to the Sunday deadline.

Thus, TikTok’s journey has become a defining chapter in the intersection of technology, politics, and global economics, serving as a case study for the challenges of navigating success in a hyper-connected world fraught with geopolitical tensions.

Related news:

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Trump’s stance on TikTok appears more lenient than previous policies, raising questions about future US-China tech regulations.

In other news..

US tightens AI chip export rules to maintain edge over China

The US government has announced new restrictions on exporting AI chips and technology, seeking to safeguard its dominance in AI development while limiting China’s access to advanced computing capabilities.

US dismantles China-backed malware infecting thousands of computers

The US Justice Department has removed malware from over 4,200 computers worldwide in an operation targeting a hacking group linked to the Chinese government.

Visit dig.watch now for the latest updates and other topics!

Marko and the Digital Watch team


Highlights from the week of 10-17 January 2025

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The EU is considering expanding its investigation into Elon Musk’s X over potential content rule violations.

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According to a Bloomberg report, one potential scenario would see Musk’s platform, X, taking over TikTok’s US operations and running them jointly.

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Digital Markets Act probes under review.

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Analysts suggest the surge in American RedNote users may be temporary, as past trends show similar platforms have faced restrictions.

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An investigation into subsidies, alleging market disruption and unfair competition.

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A bipartisan attempt for extension grows stronger.

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The upcoming shutdown could shake up $11 billion ad market.

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Google has been hit with a substantial fine for failing to comply with previous penalties. The move signals escalating tension between Russia and foreign tech platforms, especially over content hosted…

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Child safety regulations are coming soon despite the debate surrounding them.

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Several German institutions have already left X, citing concerns over its algorithms and Musk’s political stance.

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The regulation’s success will depend on consistent enforcement across the EU and balancing oversight with growth, amidst a global trend towards more comprehensive crypto regulation.


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