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TikTok’s future in the U.S grew more uncertain after the House passed a bipartisan bill Wednesday that would force China-based ByteDance to sell TikTok within 165 days or face a nationwide ban. This comes on the heels of escalating concern in Washington over China’s access to Americans’ data.
Introduced last week, the bill still needs to be cleared by the Senate. Meanwhile, President Joe Biden—who recently joined the app ahead of the 2024 presidential election—said he would sign the bill if passed.
Mounting privacy concerns have sparked a years-long battle over TikTok in the U.S. In 2020, then-president Trump issued an executive order to ban the app over national security concerns. This prompted software giant Oracle to bid for hosting TikTok’s user data as its “trusted technology partner” in the U.S.
“If history tells us anything, it’s very unlikely that a ban will happen,” said Jack Johnston, senior social innovation director at performance marketing agency Tinuiti. “Massive private equity firms in the U.S. have invested into TikTok and ByteDance. If any big action happens, it would be a forced sale.”
It’s ridiculous for Congress to single out one app while failing to act on this huge problem that’s prevalent across all social media.
Jenna Ruddock, policy counsel, Free Press Action
Some brands continue to spend on TikTok, while others are exploring rival platforms such as Meta’s Reels, YouTube Shorts and Snapchat. Still, lingering questions about TikTok’s brand safety, investment requirements, digital audio rights and the possibility of future bans deters brands from spending on TikTok.
“Banning a single platform will not address the problem at the root of the entire tech landscape,” said Jenna Ruddock, policy counsel for media-focused advocacy group Free Press Action, in a statement. “It’s ridiculous for Congress to single out one app while failing to act on this huge problem that’s prevalent across all social media.”
What TikTok divesture entails
If ByteDance agrees to sell TikTok, it’s likely that another technology company will acquire the platform. Former Activision boss Bobby Kotick reportedly expressed interest in buying TikTok earlier this month, and in 2020, Microsoft was in talks to purchase the U.S. operations of the platform.
As a result, TikTok could benefit from the technological capabilities of that company, and vice versa, especially if the platform contains an existing DSP (demand-side platform).
“What that would mean for advertisers is increased inventory and opportunities to buy that media,” said Johnston. “You will probably see decreased costs come onto the platform from direct buys, but more premium ad units and more autonomy.”