The United States has set a Sunday deadline for TikTok to sever ties with its China-based parent company, ByteDance, or shut down its U.S. operations.
The deadline comes after the Supreme Court upheld the ban in a unanimous decision, citing national security concerns. With no action from President Joe Biden to delay enforcement, companies like Apple, Google, and Oracle face potential legal liability if they continue providing services to 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 projected to generate $20 billion in revenue by 2025.
The ban poses significant challenges for small- and medium-sized businesses, influencers, and startups that rely on TikTok for revenue through brand sponsorships, affiliate marketing, and sales. TikTok says its U.S. platform generates billions for businesses selling candies, beauty products, clothes, and other goods.
For example, small food and beverage companies earned $4.1 billion in 2023 from advertising on TikTok, according to Oxford Economics data commissioned by the platform.
TikTok CEO Shou Zi Chew stated on Friday that seven million American businesses use the platform. President-elect Donald Trump, who takes office on January 20, said he would decide on TikTok’s future without providing details.
ByteDance has reportedly considered selling TikTok’s U.S. operations, with analysts estimating the business could be worth up to $50 billion.
In response to the looming ban, many users are migrating to alternatives, including China-based platform RedNote, while competitors Meta and Snap have seen their shares rise as they prepare to capture new users and ad dollars.
The future of TikTok may shift under the incoming administration of President Donald Trump, who will be inaugurated on Monday. Trump has suggested issuing an executive order to delay enforcement of the ban for 60 to 90 days but has provided no specific details.
TikTok CEO Shou Zi Chew plans to attend the inauguration and sit among high-profile guests invited by Trump, raising questions about the app’s potential reprieve.
ByteDance, which owns TikTok, is 60% owned by institutional investors, with its founders and employees holding 20% each. The company employs over 7,000 people in the U.S. and faces increasing pressure to resolve the situation as the Sunday deadline approaches.
