Will Congress Force the Sale of TikTok?

TikTok logo

Social and political controversy around TikTok has increased over the past few months, with some suggesting the only way to ensure the app’s data impartiality is to mandate TikTok’s sale by its Chinese owning company. 

A March appearance in front of US legislators by TikTok’s CEO, Shou Zi Chew, only increased polarization, calling attention to the app’s Chinese ownership and potential collaboration with the Chinese Communist Party (CCP).

During the hearing, lawmakers aggressively questioned Chew on privacy and moderation concerns, demonstrating a bipartisan skepticism but also a lack of knowledge on the subjects at hand. For example, Chew was referred to multiple times as Chinese but was in fact born in Singapore. 

Chew denied that the app has any connections with the CCP and said that it has built “a firewall to seal off protected U.S. user data from unauthorized foreign sources.” He stated his commitment to keep TikTok free from “any manipulation by any government.” 

Data Privacy Issues Escalating

Now, a Forbes investigation has revealed TikTok actually were storing certain American and European user data in China, and a member of the Senate Intel committee is calling for the Justice Department to investigate Chew for perjury. It seems like only a matter of time before the United States Government takes further action.

TikTok is already banned from government devices in the USA, Britain, Canada, and New Zealand. 

Back at the beginning of March, a House committee equally backed by Democrats and Republicans voted to advance legislation allowing the President Biden to ban TikTok on all devices in the USA. A similar legislation was struck down under President Trump, but this time another option is gaining steam: forcing TikTok’s owner, Chinese tech company ByteDance, to sell its stake in the United States version of the app. 

TikTok’s Sale Could Be Forced

China could potentially retaliate by banning an American app, but they’ve already banned Meta (Facebook and Instagram), so it would be impossible for them to match the damage of a ban on a booming social medium like TikTok. 

There’s another possibility: rather than go after an individual app, legislators might attempt to fix insufficient privacy protections systemically, with new laws affecting all social media companies. 

So far, the race for an appearance of privacy headed by Google hasn’t swept up social media in the same way. Might TikTok motivate the US government to set higher standards for data usage? 

I think it’s unlikely. In our political jockeying with China, there’s motivation to hurt them economically by hitting TikTok’s revenue. There’s no financial incentive to burden any other companies, especially ones based in the United States. 

What Would A TikTok Ban Or Sale Look Like?

If a sale is forced, social media marketing will be shaken up: with their main competitor eliminated in the U.S., Instagram and Snapchat’s video ads will likely become significantly more valuable. Advertisers on TikTok would be wise to explore alternative video advertising options sooner rather than later.

USA-based advertisers in China might also face new restrictions in retribution for any harmful legislation against TikTok. If you have ongoing marketing efforts in China, keep an eye on this story as it progresses.

Or, if you’d prefer to leave this work to the PPC experts at Market Vantage, get in touch for a free consultation.

About The Author

Share This