TikTok Had a Tumultuous Year. What’s Ahead in 2025?
WSJ Tech News Briefing
Deep Dive
Why is TikTok facing a potential ban in the U.S. in 2025?
TikTok is facing a potential ban in the U.S. due to national security concerns tied to its Chinese ownership. The Supreme Court is set to decide whether a law requiring TikTok to shed its Chinese ownership or face a ban violates the First Amendment. The ban is scheduled to take effect on January 19th, 2025, unless the court intervenes.
What is President-elect Donald Trump's stance on the TikTok ban?
President-elect Donald Trump has asked the Supreme Court to pause the TikTok shutdown process, arguing that keeping TikTok operational would preserve the First Amendment rights of its tens of millions of U.S. users. This marks a reversal from his 2020 stance, where he sought to ban the app via an executive order.
How would a TikTok ban affect U.S. users?
If a TikTok ban is implemented, the app would remain on devices where it is currently downloaded but would be delisted from app stores, preventing new users from joining. Existing users would not receive updates, leading to an increasingly outdated and potentially insecure app over time. The app would not disappear immediately but would become less functional.
What are the business challenges TikTok is facing in 2024?
TikTok is experiencing slowing growth in the U.S. market, with user growth stagnating for the first time in its history. Additionally, while ad sales are meeting growth targets, they are not exceeding them. These challenges come amid ongoing geopolitical scrutiny and competition in the social media landscape.
How has TikTok's parent company, ByteDance, been affected by geopolitical risks?
ByteDance's valuation reached $300 billion in 2024, but geopolitical risks surrounding TikTok's ownership have created uncertainty for investors. If these issues are resolved and TikTok remains in the U.S., its valuation could grow further. However, the company is caught in a political bind, as any actions it takes must also be approved by the Chinese government.
What is the significance of TikTok seeking Elon Musk's counsel?
TikTok's CEO sought Elon Musk's counsel due to Musk's strong business ties with China through Tesla. Musk's influence could potentially help TikTok navigate its challenges with the incoming Trump administration. This highlights TikTok's strategy of leveraging prominent business figures with connections in both the U.S. and China.
How have TikTok users responded to national security concerns?
Many TikTok users, particularly younger ones, have not been overly concerned about national security issues or the potential ban. The concerns raised by the U.S. government, such as data privacy risks tied to Chinese ownership, do not resonate as top-of-mind fears for most users. This has led to a sense of desensitization among the app's user base.
What are the implications of TikTok's potential ban in other countries?
TikTok has faced regulatory challenges in other countries, such as India, where it was banned, and Canada, where its offices are being shut down while the app remains available to users. If the U.S. ban sets a precedent, it could trigger a domino effect in other major markets like the EU, U.K., or Japan, posing a significant threat to TikTok's global operations.
- Supreme Court to decide on TikTok ban in January 2025
- Ban could violate First Amendment rights
- TikTok's parent company, ByteDance, refuses to sell its US business
- President-elect Trump requested a pause on the ban
- TikTok's user base remains largely unfazed by the potential ban
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