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What now for TikTok in the US?

Finding a solution that will keep the US authorities happy while also getting China on board will be difficult

Supporters of TikTok outside the Capitol in Washington DC on Wednesday. The House passed a bill with broad bipartisan support that would force TikTok’s Chinese owner to either sell the popular video app or be banned in the US. Photograph: Kent Nishimura/The New York Times
Supporters of TikTok outside the Capitol in Washington DC on Wednesday. The House passed a bill with broad bipartisan support that would force TikTok’s Chinese owner to either sell the popular video app or be banned in the US. Photograph: Kent Nishimura/The New York Times
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Cantillon
Sat Mar 16 2024 - 05:58

What now for TikTok? With a bill currently wending its way through the US political system that could effectively mean a ban for the video-sharing platform in one of its more lucrative markets, the future is once more uncertain for the Chinese-owned company.

On one side you have US authorities who want to see Chinese ownership, and by extension any potential covert intelligence gathering on American citizens, phased out of the US operations. On the other you have the Chinese authorities who have already come out against any forced sale of TikTok.

And in the middle there are 170 million TikTok users in the US, and the $16 billion (€14.7bn) in sales they generate for the platform.

What now for investors? The company’s US backers, which include private equity firm General Atlantic, Susquehanna International Group and Sequoia Capital, are in a tight spot. The once burgeoning social media platform with a bright future has become public enemy number one, and the chances of a lucrative exit from the investment are being chipped away.

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Already the vultures are circling. Former US treasury secretary Steven Mnuchin is planning a bid for the US business through a consortium. Other options being considered involve allowing Bytedance to keep its stake in the company but prevent it from having a say over how TikTok is run.

[ Explainer: Why is TikTok facing a ban in the US? ]

But finding a solution that will keep the US authorities happy while also getting China on board will be difficult.

And finding an answer that doesn’t destroy TikTok in the US will also be a challenge. While a US subsidiary breaking from its Chinese ownership has happened in the past – dating app Grindr managed it in 2020 – it does not guarantee success for others.

All this furore lends further weight to the notion of a more open social media landscape, similar to that backed by Bluesky and Mastodon, where creators can take their following with them. That takes power out of the hands of individual companies, and puts it back with consumers.

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