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EXPLAINER-What happens after the TikTok ban?
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EXPLAINER-What happens after the TikTok ban?
Jan 6, 2025 8:02 AM

Jan 6 (Reuters) - The U.S. Supreme Court will hear

arguments on Friday from TikTok and its China-based owner

ByteDance, which is seeking to block a law signed by President

Joe Biden that will ban the short-form video app beginning Jan.

19 unless it is divested from ByteDance, due to national

security concerns. TikTok requested an injunction to pause the

ban during the legal process, but the Supreme Court did not

immediately act on the request.

Here's what could happen on Jan. 19.

WHAT HAPPENS TO THE APP?

New users will not be able to download TikTok from app stores

and existing users will not be able to update the app, because

the law prohibits any entity from facilitating the download or

maintenance of the TikTok application. In a Dec. 13 letter, U.S.

lawmakers told Apple ( AAPL ) and Alphabet's Google,

which operate the two main mobile app stores, that they must be

ready to remove TikTok from their stores on Jan. 19.

Cloud service provider Oracle could see some

disruption to its work with TikTok. Oracle hosts TikTok's U.S.

user data on its servers, reviews the app's source code and

delivers the app to the app stores.

Google declined to comment, while Oracle and Apple ( AAPL ) did not

respond to requests for comment.

HOW WILL USERS BE AFFECTED?

TikTok's 170 million users in the U.S. will likely still be

able to use the app because it is already downloaded on their

phones, experts say. But over time, without software and

security updates, the app will become unusable.

Some users have begun posting TikTok videos instructing

others on how to use virtual private networks (VPNs), which mask

an internet user's location, as a way to circumvent the possible

ban.

Content creators who have built businesses from their TikTok

followings are preparing for the worst. Nadya Okamoto, who has

4.1 million followers and founded August, a menstrual products

brand, said TikTok helped her business grow organically through

viral videos. A TikTok ban could force her and other small

businesses to spend more on marketing and raise their costs.

"It's very stressful," she said. "If TikTok goes away, we'll

be okay, but it is going to be a hard hit."

WHAT HAPPENS TO TIKTOK'S EMPLOYEES?

TikTok's 7,000 employees in the U.S. are still trying to figure

out their fate. After a U.S. appeals court upheld the

sell-or-ban law on Dec. 6, pessimism spread among staffers who

began worrying about layoffs, said one current employee.

But the company has continued to make job offers for new

roles, prompting some confused job seekers to seek advice on

Blind, an anonymous forum for employees to discuss companies.

One user posted on Blind that they received a job offer from

ByteDance in San Jose, California, starting in February. Others

commented on the post, counseling the user to accept the offer

and use it as leverage in other interviews.

"I signed the offer and will wait and watch how the

situation unfolds," the user said in the Blind post.

WHAT WILL ADVERTISERS DO?

TikTok's U.S. ad revenue is expected to total $12.3 billion

in 2024, according to research firm Emarketer, and while that is

much smaller than Instagram owner Meta Platforms ( META ),

advertisers say TikTok's devoted user base means some brands

will try to advertise beyond Jan. 19.

"The ongoing assumption is the app might not be updatable,

but you'll see a groundswell of usage," said Craig Atkinson, CEO

of digital marketing agency Code3. The app's ecommerce feature

TikTok Shop, which lets users purchase products directly from

videos, has no direct competitor that advertisers can easily

switch to, Atkinson said, adding that his agency was signing new

contracts with clients to build TikTok Shop campaigns even as of

late December.

Some advertisers may continue spending beyond Jan. 19 on

TikTok and reevaluate if the app sees declining usage or

performance, said Jason Lee, executive vice president of brand

safety at media agency Horizon Media.

ARE THERE POTENTIAL BUYERS?

TikTok has repeatedly said it cannot be sold from ByteDance.

That hasn't deterred billionaire businessman Frank McCourt, a

former owner of the Los Angeles Dodgers baseball team who said

he has secured $20 billion in verbal commitments from a

consortium of investors to bid for TikTok.

McCourt has not yet spoken with ByteDance, but said he

believes the Supreme Court will uphold the law requiring

TikTok's divestment, after which the parent company would be

more open to sale discussions.

McCourt and his team have had "preliminary conversations"

with members of the incoming administration of President-elect

Donald Trump, who had tried to ban TikTok during his first term

in the White House but has since reversed his views, and are

also seeking a CEO to lead the app. McCourt's business plan for

TikTok includes migrating the app onto open-source technology

and earning revenue through ecommerce and licensing data for AI

training.

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