Breaking Down the TikTok Ban: What Will It Mean for Businesses

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Social media is a tool that is often a platform for conversation. From pioneer platforms such as MySpace to contemporaries such as TikTok and Snapchat, people worldwide have used social media to bring attention to significant causes, such as School Strikes for Climate, and #MeToo.

While social media can be a powerful tool for bringing light to issues, it’s also become a powerful platform for more nefarious uses. Indeed, some issues have taken advantage of Americans, coming from all avenues of social media – and it’s important to understand that with great power, comes great responsibility.

The latest platform to fall into regulatory crosshairs is social media juggernaut TikTok. In a world where the latest generation of online graduate MBA students are much more likely to use TikTok rather than other platforms, what impact would a ban have on how people use social media?

A Brief History of TikTok

In a world where internet giants like Meta and Alphabet are more than two decades old, TikTok is a newcomer to social media. Launched in 2017 to a global market, the platform allows users to make short video clips to share with other users.

In part, its success has been driven by its early acquisition of media startup Musical.ly in 2018. Musical.ly was a platform that allowed users to make short-form lip sync and comedy videos – by integrating the product and features into TikTok’s product, which uses a complex series of machine learning techniques to recommend new content. As a result, TikTok accelerated growth by providing a product that people wanted to engage with, with the technical structures in place to provide highly relevant and engaging content at nearly every opportunity.

TikTok rapidly grew in popularity, but this was supercharged in 2020. Easily created video content provided a vital connection with friends and loved ones, even if the world was dealing with the challenges of a global pandemic. As a result, TikTok went from being a niche player in social media to a platform rivalling the size of historical leaders such as YouTube and Facebook.

The Importance of Data

TikTok may only be a relatively new platform, but its rise to success came at a time of great controversy for other social media giants. As more and more users have jumped online, the way tech giants use and misuse data has become a highly scrutinised activity.

Social media, while similar to a traditional social group, has an incredibly powerful asset on tap – the interests and intent of billions of users. This can be used to provide targeted advertising – for example, for a new couple, the algorithms at play may promote date and gift ideas, whereas a pet lover might be recommended pet videos and places to purchase toys and treats.

While advertising can be fairly innocent, and beneficial for business, challenges arise when data is misused. The misuse of customer data harms not only marketers but all data custodians in general.

In recent years, social media companies have faced increased criticism for the ways that they have misused and abused information – from revelations of data harvesting by political operators to concerns about the mental health of young people, addicted to social media.

Concerns about TikTok’s ability to collect large swathes of user data, as well as its partial ownership by a Chinese government fund, have raised concerns that ByteDance, TikTok’s parent company, may be a national security risk for American users. As a result, the Biden Administration signed legislation in April 2024, giving nine months for ByteDance to sell the app to an approved buyer, or face being banned from App Stores across the country.

The Impacts of a Ban

Banning a platform can often have significant consequences for users. TikTok has more than 170 million users in the United States, many of whom engage with content creators regularly. This engagement feeds into opportunities for creators to monetise their content through advertising and merchandise, causing a feedback loop of growth.

It’s estimated that TikTok monetisation generated more than $16 billion in revenue for creators throughout 2023. Banning TikTok would, in part, remove the ability of creators to generate revenue on one of the world’s largest social media platforms.

A ban could also potentially reshape how an entire generation of Internet users access social media. It’s estimated that as much as forty-five percent of all TikTok users are under 25 – if TikTok were to be banned and shut down in the US, it’s quite possible that these users would need to find a new platform to engage with others, whether that be through the use of competitors like Snap, Instagram Reels, or another platform entirely.

One may wonder that business owners may simply avoid the risks of a platform ban and choose to engage online through other channels. The impacts of a TikTok ban may be potentially widespread – and transform the Internet as we know it today.

Social media is a powerful tool – no matter whether user intention is good or bad. Ultimately, companies such as ByteDance are custodians of vast troves of valuable data about end users. As a potential TikTok ban looms, regulators and businesses alike are asking themselves tough questions on how they’ll engage with this rapidly growing platform in the future.

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