The first TikTok ban was scary for most content creators on the App. While the platform was only down for a day, it caused a stir in the industry and prompted many content creators to diversify their platforms and to start using it differently, focusing more on revenue than on content to squeeze out as much money as possible until the ban materialized once again.
While the App seemed to be safe from the 2024 bipartisan law that mandated ByteDance to sell TikTok to non-Chinese owners or face a nationwide ban, the Trump Administration gave it more time at the beginning of the year and it seems like they will be extending the deadline even further now. The new deadline will be in 75 days, meaning that unless anything happens, by June 18 TikTok should be banned.
The reasons for the TikTok ban and the extension of its operations in the US
The original ban came about because lawmakers and privacy advocates were concerned about the Apps’ data collection practices and ties to the Chinese government. The Chinese government has certain policies regarding data use and exploitation that all Chinese companies have to follow, regardless of international privacy laws, and while ByteDance pushed back explaining the ownership structure of the company (60% belongs to global institutional investors, 20% with its Chinese founders, and the remaining 20% with employees), the reality is that if the government compels their data, just by being a Chinese company they cannot refuse.
Regardless, the extension of the deadline seems to be another one of the decisions that the Trump Administration is making without much regard for the law, as they are apparently negotiating with the company to ensure that it remains open instead of following through with the established plan. On a Truth Social post, Trump stated he is confident that the progress made towards ensuring TikTok’s continued operation in the U.S will succeed “My Administration has been working very hard on a Deal to SAVE TIKTOK, and we have made tremendous progress. We do not want TikTok to ‘go dark.’ We look forward to working with TikTok and China to close the Deal.”
ByteDance has acknowledged that discussions with U.S. authorities are still in progress, though any potential agreement must comply with Chinese regulations. Central to the talks is TikTok’s algorithm, a crucial component of the platform that U.S. legislation prohibits from remaining under ByteDance’s control. However, Beijing has expressed strong opposition to any transaction that includes transferring this technology, creating a significant obstacle in reaching a resolution.
One of the most looked at solutions would be an agreement that transforms TikTok’s U.S. operations into a separate company majority-owned by American investors and in which ByteDance would have retained less than a 20% stake. This solution was so good, that it was close to coming to fruition, however, the tariffs on Chinese goods announced by the Trump Administration earlier this year (and the implementation earlier this month) killed the deal on the Chinese government’s side.
Considering the volatility of the situation now that tariffs have been implemented and many American companies are choosing to shift the costs to Chinese manufacturers and suppliers, negotiations could very well be over soon. This means that TikTok’s stock would likely be affected, as would their investors, the closer the June deadline comes.
Since the original deal involved companies like Oracle, which already hosts TikTok’s U.S. user data, or Amazon, which has the resources to do anything as of today, it was a pity to see it be tanked by decisions from the same administration that has repeatedly stated they wish to see the App remain functioning.