(Updates to reflect app ban)
By Sheila Dang and Jaspreet Singh
Jan 19 (Reuters) - TikTok stopped working for 170
million Americans late on Saturday after the U.S. Supreme Court
on Friday ruled against TikTok's bid to avoid a ban that could
shut the app down.
The ban is the end result of 2024 legislation passed on
national security concerns that called for TikTok parent
ByteDance to sell the popular short-video app or see it shut in
the United States on Jan. 19.
It remained unclear how long the ban would stay in place as
President-elect Donald Trump, who takes office on Monday, has
said he would try to find a "political resolution" of the issue
to keep the app operating in the United States.
On Sunday, Trump said on Truth Social: "SAVE TIKTOK!"
Here is what is happening now.
WHAT HAPPENS TO THE APP?
New users will not be able to download TikTok from Apple ( AAPL ) and
Google 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.
It was not immediately clear if TikTok's business partners,
including Oracle, which provides TikTok's cloud infrastructure
services and stores its U.S. user data, has suspended services.
TikTok plans to keep paying its 7,000 employees in the U.S.,
the company's leadership has said in an internal memo.
HOW WILL USERS BE AFFECTED?
TikTok's 170 million users in the U.S. are unable to use the
app even if they did not delete it from their phones.
As of Sunday, U.S. users hoping to access TikTok through
virtual private networks, or VPNs, which can conceal the
internet protocol, or IP, address of a user and thereby their
location, were unsuccessful.
Other Chinese social media apps such as RedNote, known in
China as Xiaohongshu, are expected to continue gaining traction
among U.S. users.
Content creators who have built businesses from their TikTok
followings have urged their followers to find them on
alternatives such as Instagram and YouTube.
WHAT WILL ADVERTISERS DO?
Advertisers have rushed to prepare contingency plans ahead
of the ban, fearing a shutdown will jeopardize their campaigns
on the platforms. One marketing executive described it as a
"hair on fire" moment for the ad world, after months of
conventional wisdom saying that a solution would materialize to
keep the short-video app up and running.
TikTok has continued to pitch advertisers on new features,
like a tool launching in test form that would make it easier to
create, modify and add advertisements in bulk.
The ban puts more than $11 billion in annual U.S. ad
investment up for grabs, according to a forecast from marketing
group WARC Media.
"Wall Street will be watching the results of Meta, Snap, and
others to see who benefits from this rapid spend shift," said
Craig Atkinson, CEO of digital marketing agency Code3.
WHAT HAPPENS TO U.S.-CHINA TRADE RELATIONS?
A TikTok ban could worsen trade tensions between the U.S.
and China that were already strained after export curbs on
advanced American semiconductor technology to Beijing.
However, "such a ban would be no surprise as it has been
under discussion for five years," said Sean Ennis, professor
from the University of East Anglia.
Trump could try to use an executive action to protect TikTok
for his four years in office, but he could use the risk of him
changing his position to extract something meaningful from
China, analysts at LightShed Partners have said.
Reversing the ban could give Trump some bargaining power
with China, analysts say.
WHO ARE THE 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. His
consortium values the app without its algorithm at around $20
billion.
Other media have reported that Chinese officials are in
talks about potentially selling TikTok's U.S. operations to
billionaire Elon Musk, a big financial backer of Trump.
TikTok called those reports "fiction".
Hours before the ban went into effect on Saturday, U.S.
search engine startup Perplexity AI submitted a bid to merge
with TikTok's U.S. operations, according to a source familiar
with the matter.