With millions of users, creators and brands holding their breath, an impending Supreme Court decision will determine TikTok’s future in the US – and potentially reshape the entire digital media landscape.
The US Supreme Court is expected to rule this week on a case that will determine the future of TikTok in the US. On Friday, the Court heard arguments from TikTok in its appeal to reverse a law that would require its Chinese parent company ByteDance to divest the app or face a nationwide ban in the US, set to go into effect on Sunday, January 19. The law, signed into effect by President Joe Biden last spring, was born amid growing lawmaker concerns about national security and American data privacy.
Yet to secure a buyer, TikTok plans to shut off the app in the US without intervention on Sunday, according to a report today from Reuters.
Though the technical logistics of not only banning the platform from app marketplaces but eventually wiping it from user devices remains somewhat murky, the company’s lawyer Noel Francisco said in arguments Friday, “As I understand it, we go dark – essentially the platform shuts down.”
The impact of a potential ban will be substantial; TikTok’s user base in the US exceeds 170m, and organizations using the app to conduct business contributed more than $24bn to the US gross domestic product in 2023 alone, according to research from Oxford Economics.
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How the Court will rule remains unclear. There has been some speculation that the Court’s conservative majority may overrule the law in a signal of support for president-elect Donald Trump, who recently said he has a “warm spot” for the platform and suggested he intends to preserve the company’s ability to operate in the US. During Friday’s hearing, Justice Samuel Alito urged the Court to consider a temporary block on the law.
However, the justices appeared broadly skeptical of TikTok’s arguments in the courtroom, suggesting that the Court may be interested in upholding the law. Both Justices Elena Kagan and Amy Coney Barrett pushed back against TikTok’s arguments that the law impinges on the company’s First Amendment rights to free expression, noting that the law targets Chinese-owned ByteDance specifically.
When we can expect a decision is also an open question. The Court issued opinions in a smattering of other cases today but remained mum on TikTok, to the surprise of many. As it stands, no other dates have been slated for the Court to rule.
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Could a last-minute buyer swoop in?
In the absence of a Supreme Court ruling, the rumor mill about a potential last-minute buyer is churning.
Bloomberg reported on Monday that Chinese officials are considering a sale to billionaire X owner and Trump ally Elon Musk, though TikTok has since called the report “pure fiction.”
The possibility has been derided by industry analysts, too. Mike Proulx, vice-president and research director at Forrester, says: “At its core, the crux of the TikTok legal debacle is about susceptibility to influence. Given this, it would be ironic if the world’s wealthiest person, who’s seemingly the trusted right hand of the incoming US president – and who’s already been using his power to dominate discourse on another consequential social media platform that he owns – were to now own and influence the most culturally significant social media platform of our time.
Several other entities and investors have expressed interest in acquiring TikTok’s US assets, including Project Liberty, backed by investors such as Shark Tank’s Kevin O’Leary, and former Activision Blizzard CEO Bobby Kotick, who reportedly discussed financing options with OpenAI CEO Sam Altman. Others, such as Rumble, Amazon and former Treasury Secretary Steve Mnuchin, have also floated proposals to purchase the platform.
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Beyond the user: creators & brands brace for impact
Of course, it’s not just TikTok’s dedicated users who hang in the balance. So, too, do the million-plus creators on the app and the approximately 7m businesses that rely on the app to conduct business. Banning the platform would also upend commerce pipelines for countless merchants, as TikTok Shop has quickly cemented itself as among the most valuable digital sales channels. The Court’s forthcoming decision – which could arrive at any moment – will not only determine the fate of the app but also reshape the digital advertising ecosystem and social media and commerce strategies for brands.
Media industry leaders are somewhat divided on their predictions for what’s to come.
According to Evan Wray, CEO of influencer marketing platform Mavely, we’re likely to witness one of two decisions: either the Court will institute a temporary block, giving itself more time to weigh TikTok’s fate in the US, or it will uphold the law, moving forward with a ban.
Brenlyn Motlagh, director at PR and investor relations firm Gateway Group, is betting on the latter. “Based on the hearing [on Friday], it seems the Supreme Court is leaning toward banning TikTok, with skepticism apparent across the board.”
Others, however, are more bullish on TikTok’s future in the US. “I don’t believe TikTok is going anywhere,” says David Coomer, CEO of marketing agency Coomer. “We’re betting that nothing changes on the platform in coming months.” He and his team are currently planning the launch of a handful of Super Bowl LIX campaigns for TikTok that are slated to go live on January 20, a day after the ban is set to go into effect.
Regardless of what’s to come, many media and marketing leaders are ringing warning bells, urging creators and brands to brace for the potential impact.
Content creators who have made a living on the platform – and the brands that work with them – had better “act swiftly to reassess and diversify their strategies,” says Scott Sutton, CEO of a social media management platform Later.
Amid the uncertainty, businesses must act proactively to mitigate potential disruptions. They should evaluate their reliance on TikTok, forge stronger cross-platform strategies and engage with creators directly to understand where their audiences are migrating, industry leaders advise. “The sooner brands talk to their influencers, partners and audiences, the better,” says Jordan Leschinsky, vice-president and head of strategy at content agency Codeword.
Can TikTok’s rivals fill the void?
Many experts have posited that YouTube Shorts and Instagram Reels, two short-form video offerings designed to rival TikTok, are best poised to absorb displaced creators and brand dollars.
In the long term, YouTube Shorts could outrun Reels in the event of TikTok’s disappearance in the US, some experts say, thanks to YouTube’s robust tools for creators and revenue-sharing program. “While the initial surge of audiences, creators and brands will likely be to Instagram Reels, creators will invest in platforms that invest in them. YouTube Shorts will be the place to go for content that’s fresh, unique, and audience-first,” Leschinsky predicts.
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Reels and Shorts may not be the only well-positioned alternatives. In the broader market, emerging platforms such as RedNote have begun to attract attention as potential successors to TikTok. Google searches and social posts about RedNote spiked this week amid the uncertainty enveloping TikTok. The app also secured the top-ranked spot in the Google Play store on Wednesday, according to Sensor Tower data provided to NPR. But RedNote is also Chinese-owned and may face similar scrutiny from lawmakers around its transparency and data privacy practices.
But RedNote won’t be the sole target of criticism – the tension swirling around TikTok in Washington may soon inspire broader scrutiny of digital platforms and their practices. Many have already come under the gun. Early last year, executives from TikTok, Meta, X, Snap and Discord were grilled by lawmakers in an intense, four-hour Senate hearing focused on children’s online safety.
All things considered, this trend could prove beneficial, according to Tony Marlow, CMO at LG Ad Solutions, who says that regulatory pressure may help “drive the industry toward greater transparency and compliance while accelerating innovation to meet the needs of both consumers and advertisers.”
Of course, with Donald Trump set to return to the White House next week, tech policy in the US may soon take another direction altogether, as the president-elect has expressed his intention to relax regulations on businesses.
In the interim, some remain optimistic about the industry’s adaptability. “The digital advertising industry thrives on its capacity to turn challenges into innovations,” says Marlow, “with platforms that prioritize adaptability, accountability and user experience emerging as leaders.”