On Sunday, the United States set a deadline for TikTok to cut ties with its China-based parent company, ByteDance, or close its operations in the United States.
The deadline comes after the Supreme Court upheld the ban in a unanimous decision, citing national security concerns. With President Joe Biden taking no action to delay implementation, companies like Apple, Google, and Oracle face potential legal liability if they continue to provide services for the app.
The ban, enacted under a law signed by Biden in April, would mark the first U.S. shutdown of a major social media platform. TikTok has 170 million domestic users and is expected to generate $20 billion in revenue by 2025.
The ban poses significant challenges to small and medium-sized businesses, influencers and startups that rely on TikTok to generate revenue through brand sponsorships, affiliate marketing and sales. TikTok says its American platform generates billions for companies that sell candy, beauty products, clothing and other goods.
For example, small food and beverage companies earned $4.1 billion in 2023 from ads on TikTok, according to Oxford Economics data commissioned by the platform.
TikTok CEO Shou Zi Chew said Friday that seven million U.S. businesses use the platform. President-elect Donald Trump, who takes office on January 20, said he would decide TikTok’s future without providing details.
ByteDance has reportedly considered selling TikTok’s US operations, with analysts estimating the business could be worth as much as $50 billion.
In response to the looming ban, many users are migrating to alternatives, including China-based platform RedNote, while rivals Meta and Snap have seen their shares soar as they prepare to attract new users and advertising dollars.
TikTok’s future may change under the incoming administration of President Donald Trump, who will be inaugurated on Monday. Trump proposed issuing an executive order to delay implementation of the ban for 60 to 90 days, but did not provide specific details.
TikTok CEO Shou Zi Chew plans to attend the inauguration and sit among the prominent guests invited by Trump, raising questions about the possibility of postponing the app.
ByteDance, which owns TikTok, is 60% owned by institutional investors, with its founders and employees owning 20% each. The company employs more than 7,000 people in the United States and faces mounting pressure to resolve the situation as a Sunday deadline approaches.