Explainer-What happens on TikTok when it’s dark? Via Reuters


By Sheila Dang and Jaspreet Singh

(Reuters) – TikTok stopped working for 170 million Americans on Saturday after the U.S. Supreme Court on Friday ruled against TikTok’s bid to avoid a ban that could have shut down the app.

The ban is the end result of 2024 legislation passed over national security concerns that called on TikTok parent ByteDance to sell the popular short-video app or see it shut down in the United States on January 19.

It remains unclear how long the ban will remain in place as President-elect Donald Trump, who took office on Monday, said he would try to find a “political resolution” to the issue to resume operations. on the app in the United States.

On Sunday, Trump told Truth Social: “SAVE TIKTOK!”

Here’s what happened today.

WHAT HAPPENS IN THE APP?

New users cannot download TikTok from the Apple (NASDAQ:) and Google (NASDAQ:) app stores and existing users cannot update the app, as the law prohibits any entity to facilitate the download or continuation of the TikTok application.

It was not immediately clear whether TikTok’s business partners, including Oracle (NYSE: ), which provides TikTok’s cloud infrastructure services and stores user data in the US, have suspended services.

TikTok plans to continue paying 7,000 US employees, company management said in an internal memo.

HOW WILL USES BE AFFECTED?

The 170 million TikTok users in the US can’t use the app even if they haven’t deleted it from their phones.

On Sunday, US users hoping to access TikTok through a virtual private network, or VPN, which can hide a user’s internet protocol, or IP, address and thus their location, were unsuccessful. .

Other Chinese social media apps such as RedNote, known in China as Xiaohongshu, are expected to continue to gain traction with US users.

Content creators who have built businesses from their TikTok followings are encouraging their followers to find them on alternatives like Instagram and YouTube.

WHAT CAN ADVERTISERS DO?

Advertisers rushed to prepare contingency plans before the ban, fearing that the shutdown would damage their campaigns on the platforms. One marketing executive described it as a “hair on fire” moment for the ad world, after months of conventional wisdom saying a solution would happen to keep the short-form video app afloat. and running.

TikTok continues to roll out new features to advertisers, such as a tool launched in test form that makes it easy to create, modify and add ads in bulk.

The ban puts more than $11 billion in annual US ad investment up for grabs, according to a forecast from marketing group WARC Media.

“Wall Street will be watching the results of Meta (NASDAQ:), Snap, and others to see who benefits from this rapid shift in spending,” said Craig Atkinson, CEO of digital marketing agency Code3.

WHAT WILL HAPPEN TO US-CHINA TRADE RELATIONS?

The ban on TikTok could exacerbate trade tensions between the US and China that have already straightened after Beijing curbs exports of advanced American semiconductor technology.

However, “such a ban is not surprising because it has been discussed for five years,” said Sean Ennis (NYSE: ), professor from the University of East Anglia.

Trump may try to use an executive action to protect TikTok during his four years in office, but he may risk changing his position to get something meaningful out of China, it said. by analysts at LightShed Partners.

Changing the ban would give Trump bargaining power with China, analysts say.

WHO ARE THE POTENTIAL BUYERS?

TikTok has repeatedly said it will not sell from ByteDance.

That didn’t stop billionaire businessman Frank McCourt, former owner of the Los Angeles Dodgers baseball team. His consortium valued the app without its algorithm at nearly $20 billion.

Other media reported that Chinese officials are in talks about the potential sale of TikTok’s US operations to billionaire Elon Musk, a big financial supporter of Trump.

© Reuters. The Tik Tok logo, the US flag and a judgment gavel can be seen in this illustration taken August 6, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

TikTok called the reports “fiction”.

Hours before the ban began on Saturday, US search engine startup Perplexity AI submitted a bid to merge TikTok’s US operations, according to a source familiar with the matter.





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