The prospect of TikTok being banned in the U.S. is becoming more tangible, following the signing of a bill into law on April 24 by President Biden. This bill includes a provision that could potentially ban TikTok, a platform with 170 million American users.

The legislation, part of a $95 billion package primarily focused on aid to Ukraine and Israel, was swiftly passed by the Senate on April 23 and had previously received approval from the House of Representatives.

As for the timeline and likelihood of the ban taking effect, it remains uncertain. The legal process and potential challenges from TikTok's parent company, ByteDance, could delay or alter the implementation of the ban. It's essential to stay updated on any developments regarding this issue to understand the ultimate outcome.

Who owns TikTok?

ByteDance, the technology company based in Beijing, is the owner of the TikTok app. The Chinese ownership has been a central concern for lawmakers advocating for the ban. Members of Congress from various parties and government officials have raised alarms about the potential national security risks posed by Chinese ownership, suggesting that the data of millions of Americans could be subject to surveillance by the Chinese government.

FBI Director Christopher Wray emphasized these concerns, stating on NBC Nightly News in April that TikTok represents a national security threat due to its parent company's ties to the Chinese government.

Additionally, legislators have accused TikTok of being used as a tool for Chinese government propaganda, alleging that the platform downplays negative content related to China while amplifying posts that are detrimental to the United States.

In response, TikTok's CEO Shou Zi Chew testified before a House committee in March, asserting that TikTok is secure and not controlled by the Chinese government. However, lawmakers remained skeptical and critical of TikTok despite Chew's testimony.

Is TikTok getting banned?

You're correct that several steps must occur before a potential ban on TikTok is enacted.

According to the bill, ByteDance would have a minimum of nine months to divest from TikTok, and President Biden could extend this period by an additional three months if needed. A sale of TikTok to a non-Chinese owner would likely prevent the ban from being enforced.

However, executing a sale could be extremely challenging. ByteDance might refuse to part with a platform as valuable as TikTok, and it's uncertain whether the Chinese government would permit such a transaction to take place. These factors add complexity to the situation and could significantly impact the outcome of any potential ban on TikTok in the U.S.

That's a significant point to consider. With ByteDance valued at $220 billion during its last funding round in 2023, the number of companies capable of making such a substantial purchase is limited. The sheer magnitude of the acquisition cost could further complicate efforts to sell TikTok and may impact the feasibility of averting a potential ban through ownership transfer.

Determining TikTok's standalone value apart from ByteDance and whether a potential purchase would include TikTok's algorithm engine are crucial considerations in any acquisition scenario.

Antitrust concerns could indeed restrict rivals like Meta (formerly Facebook) and Google from acquiring TikTok. Moreover, any potential buyer would need approval from the U.S. government.

Steve Mnuchin, the former U.S. Treasury Secretary, mentioned on CNBC in March that he is working on forming an investor group that could use private equity to make a bid for TikTok.

In 2020, Microsoft, Oracle, and Walmart engaged in discussions with ByteDance after former President Trump issued an executive order to ban TikTok within 45 days if it was not sold. However, the order faced legal challenges, leading to its blockage in court, allowing TikTok to continue operating without disruption.

When would a TikTok ban happen?

The timeline for a potential ban on TikTok in the U.S. could indeed span over several years due to various factors such as court challenges and legal proceedings outlined in the bill.

If TikTok is not sold within the nine-month timeline specified in the bill, the earliest a ban could occur would be January 2025. If President Biden extends this period by three months, the ban could be delayed until April 2025. However, ByteDance could file lawsuits to challenge the implementation of the law, leading to further delays that could extend the timeline to 2026 or beyond.

While the U.S. contemplates a ban on TikTok, it's worth noting that India had already banned the platform in 2020, citing similar national security concerns. India, with about 200 million users at the time, witnessed many of its top users and influencers transitioning to competing platforms like Instagram, as reported by The Associated Press.