The alarmist headlines grow louder these days — TikTok Ban: It’s Here! Americans Sound Off on TikTok Ban in Viral Rants! Say Farewell to TikTok!
Content creators and influencers who earn their living from TikTok are having a toxic freakout and spreading misinformation about what ByteDance and the Chinese government can and can’t actually do.
Neither alarmed nor freaked out, we opted to do something wacky in this conversation and ask CMI’s chief strategy advisor, Robert Rose, to look at the challenges through the lens of practicality. Watch this video or read on for his take:
1. What does the TikTok bill say?
Because I love you all, I read US House Resolution 7521 (the TikTok bill), so you don’t have to. Slightly fewer than 2,00 words, it’s a short bill. But it’s still written in politician legalese. It’s not the most entertaining of reads.
Let’s review the summary. To make it more entertaining, I’ll invoke my inner Jeff Spicoli (from the movie Fast Times at Ridgemont High) to explain:
“So, dude, check it out. Right now, TikTok’s controlled by China — the uncoolest of the five uncool countries. And we don’t trust them. So, TikTok’s either got to sell themselves to somebody the president of the US says is cool, or it’s gonna be bummer city, and they’ll get the full slam and be nada in the United States. Oh, and even if they find somebody gnarly to sell to, they gotta give every user their cool data. If they don’t, then the attorney general dude can hit ’em with this mondo $500 person per user lawsuit action.”
OK, so now you get it. TikTok must divest itself of its Chinese control, or the U.S. will ban it. And even if it does sell, they now must give everybody access to their data.
Now, let’s review the likeliest outcomes from that:
2. Would a ban even be enforceable?
If you’ve been on the internet for any time, you might wonder how the government would even enforce such a ban. How do you block an app that’s that big? Well, the bill actually doesn’t BAN TikTok. It makes anyone helping ByteDance distribute TikTok content subject to a civil penalty.
So, the federal government wouldn’t go after ByteDance. The attorney general would sue companies like Oracle (for hosting the data), Apple or Google (for supplying the app), or Comcast, Spectrum, Verizon, AT&T, etc. (for carrying the data).
They explicitly CANNOT go after individual users, employees, or even the owner of TikTok for using the application. So, it’s not an infraction to USE the app; It’s an infraction to DISTRIBUTE the app. The penalties are defined at $5,000 per TikTok user. With more than 100 million U.S. users, that fine could equate to $500 billion.
If you think that sounds silly — and relatively unenforceable — I do, too.
3. Who would buy TikTok?
Rumors abound about former politicians putting together investment groups and big companies such as Microsoft, Google, or Apple courting the new TikTok. But the act doesn’t stipulate that the new TikTok must be owned by a U.S. company. It just can’t be controlled by a “foreign adversary country,” which means China (including Hong Kong), Cuba, Iran, North Korea and Russia.
So, if a Canadian company ended up as the winner, that might be fine. Basically, the U.S. president (whoever that is at the time) decides what’s OK.
4. What about user data?
If the existing bill passes the Senate and is signed by the president, ByteDance (regardless of the divestiture) must publish a feature so every person can export ALL their content — images, videos, text, etc. If the company fails to do that, it faces a civil liability of $500 per person.
5. When could this happen?
The U.S. Senate has not yet announced plans to bring the House bill to its floor. But if the bill becomes law, TikTok would have six months to find a buyer and execute a sale. If they couldn’t, TikTok would be banned, but after six months, they could come back with a buyer that the president deems “cool.”
6. Is this just about TikTok?
Any social media company controlled by a foreign adversary would be subject to this law. But since the latest short-form video platform from North Korea has yet to go viral, it kind of singles out TikTok. The bill calls out an exception for platforms that provide product reviews and travel information. That’s oddly specific, but I haven’t figured out who that might protect.
You may see a ton of videos saying ByteDance is prohibited from selling itself because Chinese law prohibits the export of technology. The argument seems to be that even if ByteDance wanted to sell TikTok, it couldn’t. Some TikTok users even suggest the bill is a conspiracy created by politicians who know the Chinese law and want to ban the app outright.
A ban may be the ultimate goal, but Chinese law is irrelevant. ByteDance is NOT owned by the Chinese government. It is owned by a combination of international investors, including its Chinese co-founders and its employees (including 7,000 Americans). The Chinese government has a 1% stake and board seat in ByteDance.
Additionally, the referenced Chinese law does NOT include social media algorithms.
Now, it’s fair to say the Chinese government won’t willingly allow a sale and may even require some kind of “approval.” It’s also plausible that ByteDance will hide under the government’s coattails, claiming, “We’re not allowed to sell.” But to say they are prohibited isn’t accurate. And to suggest Congress is conspiring gives too much credit to the intelligence of the current Congress.
7. What’s likely to happen in marketing?
The short answer is not very much, and certainly not in the near term. The Senate hasn’t even agreed to bring the bill to the floor. They may just delay it, rewrite it, or do nothing. This means weeks or months of wait-and-see.
For marketers, the drama will likely have more impact than the things that happen.
TikTok has become one of the core marketing channels for many B2C brands. B2B brands also use TikTok for paid advertising, employee advocacy, and influencer marketing. In CMI’s latest research, 19% of B2B marketers say they use TikTok, more than double the previous year.
The key is to be aware. If your team is considering or already using TikTok as a platform, it’s probably still a great channel for you and almost certainly will remain so for the foreseeable future. But if you’re considering using the platform for something other than promoting your other content platforms, be careful. If your brand is considering a sizeable investment into a deep editorial TikTok strategy, be a little more circumspect.
If you use TikTok as an influencer platform, you may see a few of the more influential creators leave or diversify to other platforms. That may distract some. It will also create greater competition on platforms like Meta’s Reels and LinkedIn.
Just remember this: If TikTok goes away tomorrow, the attention demand will not disappear. It will just shift to whatever the new (or old) thing is. If you’re prepared to pivot your content and marketing, you’ll be fine.
As I’ve said for years, the core lesson is not to build your house on rented land. You never know when the ground will shift beneath your feet.
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Cover image by Joseph Kalinowski/Content Marketing Institute
