Recent polling results released by the Associated Press and the NORC Center for Public Affairs Research on March 15th indicate a clear divide in American society regarding the issue of whether TikTok should be banned. The survey shows that 31% of American adults support a nationwide ban on TikTok, while 35% oppose it. Among daily active users of TikTok, a staggering 73% are against the ban.
Will TikTok actually be banned?
Facing the ban passed by the U.S. House of Representatives, TikTok's future is fraught with challenges and uncertainties. TikTok has expressed its firm commitment to defending its legal rights, having successfully challenged similar bans in court before. Additionally, the sale of TikTok involves complex technological and legal issues.
Nevertheless, former U.S. Treasury Secretary Steven Mnuchin has shown keen interest in acquiring TikTok. He expressed support for the legislation on Thursday, stating his plans to assemble a consortium to acquire this "great business."
It's worth noting that TikTok holds significant sway in the U.S. market, and some large-scale companies like Meta, Google, and Microsoft may not attempt to acquire TikTok as the Biden administration is leveraging antitrust laws to curb further expansion by tech giants.
Another challenge is that potential buyers may not gain access to TikTok's core algorithm. This secret algorithm is crucial in attracting tens of millions of American users who spend an average of 90 minutes per day on the app and is central to its success.
For TikTok investors, they are closely monitoring the prospects of an initial public offering (IPO). ByteDance, when it repurchased shares from existing investors last year, was valued at over $200 billion, and the company recently initiated a new share buyback program. However, if TikTok is forced out of the U.S. market, its valuation could take a significant hit.
How will the TikTok ban play out?
If this ban formally becomes law, it will first affect mainstream app stores like Apple and Google, which will have to cease distributing or updating TikTok. Additionally, web hosting companies will also be prohibited from providing server support and maintenance services to TikTok.
Why the dramatic reversal by Trump?
Trump's unexpected opposition to the House bill targeting TikTok has garnered widespread attention. Speculations suggest that this change in stance might be influenced by former government officials lobbying him, who have close ties to billionaires with stakes in ByteDance.
The Washington Post reported another factor behind Trump's opposition to the ban on Tuesday. The report suggested that Trump's animosity towards Meta's CEO Mark Zuckerberg escalated after watching a conservative documentary produced by David Bossie, the chairman of Citizens United. The documentary accused Zuckerberg of being instrumental in Trump's loss in the 2020 election.
Moreover, Trump's opposition to the bill could also stem from personal economic and political interests. According to Oded Shenkar, a China expert and professor at Ohio State University, Trump might attract more attention to his new projects by siding with TikTok, a platform beloved by many young people, thereby enhancing his influence among young voters.
Who stands to benefit from the TikTok ban?
Analysts widely believe that if TikTok faces restrictions or a ban in the U.S., Meta, the parent company of Facebook and Instagram, is poised to be the biggest winner. Mike Proulx, Vice President and Research Director at Forrester, emphasized, "A TikTok ban effectively hands Meta’s short video product Reels a de facto monopoly advantage."
According to Forrester's youth survey conducted last year, the usage of Instagram Reels has significantly increased, with an annual growth rate of 11 percentage points. Today, nearly one-third of American teenagers use Reels at least once a week.
Once TikTok is banned, the major options for short-form video content in the market will be Reels and YouTube Shorts. Proulx pointed out, "This means that in a world without TikTok, Meta stands to not only attract more users but also profit from ad revenue that would have originally gone to TikTok."
