The US clock is ticking (for) TikTok

The ongoing TikTok legal saga in the USA has entered its most delicate phase yet, with a federal appeals court ruling to uphold a law that could force its Chinese parent company, ByteDance, to divest TikTok’s US operations by 19 January 2025 or face an unprecedented ban.

TikTok must now urgently appeal to the Supreme Court to either block or reverse a law mandating ByteDance’s sale of the popular short-video platform by 19 January, following an appeals court’s recent decision to deny additional time. TikTok and ByteDance submitted an emergency request to the US Court of Appeals for the District of Columbia, seeking an extension to present their arguments before the US Supreme Court.

With 170 million American users and billions in ad revenue, the platform, a digital giant particularly beloved by younger generations, now stands on the edge of a ban in its largest foreign market. At the centre of this unprecedented conflict lies a confluence of national security concerns, free speech debates, and economic implications far beyond TikTok.

The incipit of the current conflict can be traced back to 2020 when then-President Donald Trump attempted to ban TikTok and Chinese-owned WeChat, citing fears that Beijing could misuse Americans’ data or manipulate public discourse through the platforms. The courts blocked Trump’s effort, and in 2021, President Joe Biden revoked the Trump-era orders. Yet bipartisan concerns about TikTok’s ties to the Chinese government remain. Lawmakers and US intelligence agencies have long raised alarms about the vast amount of data TikTok collects on its American users and the potential for Beijing to exploit this information for espionage or propaganda. This year, Congress passed a bill with overwhelming support requiring ByteDance to divest its US assets, marking the strictest legal threat the platform has ever faced.

The recent appeals court decision to uphold the law has been seen as necessary by Biden’s administration to protect US national security. The ruling cited the ‘well-substantiated threat’ posed by the Chinese government’s relationship with ByteDance, arguing that China’s influence over TikTok is fundamentally at odds with American free speech principles. Attorney General Merrick Garland praised the decision, calling it a crucial step in ‘blocking the Chinese government from weaponising TikTok.’ However, critics of the ruling, including free speech advocates and TikTok itself, have pushed back. The American Civil Liberties Union (ACLU) warned that banning the app would violate the First Amendment rights of millions of Americans who rely on TikTok to communicate and express themselves.

TikTok has vowed to appeal to the Supreme Court to halt the ruling before the 19 January deadline. Consequently, the Supreme Court’s decision will determine whether the platform will survive under ByteDance’s ownership or face a US ban. However, suspicions and obstacles loom even if ByteDance attempts to sell TikTok’s US operations. Any divestiture would need to prove the app is wholly independent of Chinese control—a requirement China’s laws make nearly impossible. ByteDance’s prized algorithm, the key to TikTok’s success, is classified as a technology export by Beijing and cannot be transferred without Chinese government approval.

On the other hand, the economic consequences of a TikTok ban could be profound. Advertisers, who have collectively poured billions into the platform, are closely monitoring the situation. While brands are not yet pulling their marketing budgets, many are developing contingency plans to shift ad spending to rivals like Meta-owned Instagram, Alphabet’s YouTube, and Snap. These platforms, all of which have rolled out short-form video features to compete with TikTok, stand to reap enormous benefits if TikTok disappears from the US landscape. Meta’s stock price soared to an all-time high following the court ruling, reflecting investor optimism that its platforms will absorb TikTok’s market share.

Content creators and small businesses that rely on the app for income now face an uncertain future. Many influencers urge followers to connect with them on alternative platforms like Instagram, YouTube, and X (formerly Twitter) in case TikTok is banned. For small businesses, the situation is equally hard. TikTok’s integrated commerce feature, TikTok Shop, has exploded in popularity since its US launch in September 2023. This year, the platform generated $100 million in Black Friday sales, offering brands a unique and lucrative e-commerce channel. For merchants who have invested in TikTok Shop, a ban would mean losing a critical revenue stream with no comparable alternative.

Yet TikTok’s rise in the US has transformed digital advertising and e-commerce and reshaped global supply chains. Like competitors Shein and Temu, TikTok Shop has connected American consumers with low-cost vendors, many of whom ship products directly from China. This dynamic reflects the extensive economic tensions underpinning the TikTok controversy. The USA, wary of China’s growing tech influence, has imposed strict export controls on Chinese technology and cracked down on perceived threats to its national security. Beijing, in turn, has retaliated with bans on critical minerals and stricter oversight of technologies leaving its borders. TikTok has become the latest and most visible symbol of this escalating US-China tech war.

The path forward is fraught with uncertainty. President Biden, whose administration has led the charge against TikTok, can extend the 19 January deadline by 90 days if he determines that a divestiture is in progress. This alternative would push the final decision to President-elect Donald Trump, who has offered mixed messages about his stance on TikTok. While Trump previously sought to ban the app, he now claims he would not enforce the new law. Nevertheless, the legislation has broad bipartisan support, making it unlikely that a new administration could simply ignore it. Tech companies, meanwhile, face legal risks if they continue to provide services to TikTok after the deadline. App stores like Apple and Google and internet hosting providers could face billions in fines if they fail to comply.

The Chinese government’s role adds another layer of complexity. Beijing has fiercely opposed US efforts to force ByteDance into a sale, framing the TikTok dispute as a ‘commercial robbery’ designed to stifle China’s technological ambitions. By classifying TikTok’s algorithm as a protected export, China has clarified that any divestiture will be a lengthy and politically charged process if it happens at all. Either way, it leaves ByteDance caught between two powerful governments with irreconcilable demands.

For now, TikTok remains fully operational in the US, and its users continue to scroll, create, and shop as usual. However, the next few weeks will determine whether TikTok can escape its existential question or join the growing list of casualties in the US-China tech war. The outcome will shape the future of one of the world’s most influential social media platforms and set a precedent for how governments regulate foreign-owned technology in an era defined by digital dominance and geopolitical rivalry. Whether through divestiture, court intervention, or an outright ban, TikTok’s fate in the US marks a turning point in the ongoing struggle to balance national security, economic interests, and the free flow of information in an inter(net)connected world.