TikTok Faces Temporary Shutdown in the US Amid Security Concerns

January 19, 2021

TikTok has notified its US users that its platform will be "temporarily unavailable" beginning January 19th due to compliance with a federal law. This law effectively bans the app in the US, as it restricts companies from accessing TikTok through app stores and cloud services if its parent company, ByteDance, is not owned by a non-adversarial country.

President-elect Donald Trump has indicated that he may grant a 90-day extension to TikTok to negotiate a deal with the government and keep the app operational. The law does not explicitly ban TikTok but prohibits companies from providing access to the platform unless ByteDance sells to a non-adversarial entity.

Congress has concerns about ByteDance's alleged ties to the Chinese government and the potential for the Chinese Communist Party to access user data or disseminate propaganda through TikTok. The outcry from users and TikTok's supporters has prompted both Biden and Trump to address the issue.

If Trump grants an extension, he must convince Congress to repeal the ban or find alternative solutions. However, even if he assures Apple and Google that his administration will not enforce the law, there is no guarantee of future compliance. Each time the companies fail to comply, they could face fines of $5,000 per user access.

Impact on the Tech Industry:

Meta (META): A potential beneficiary from TikTok's woes is Meta (META). Instagram, owned by Meta, could see a significant increase in advertising revenue if TikTok exits the market.

Snapchat (SNAP): TikTok alternatives like Snapchat may gain users who would have otherwise used TikTok. However, Snapchat must ensure sustained user engagement to retain advertising dollars.

Pinterest (PINS): Pinterest could also benefit from TikTok's shutdown. While different from TikTok, it offers e-commerce opportunities for online retailers, which TikTok has facilitated through its influencer base.

The future of TikTok in the US remains uncertain and depends on the actions of Trump and Congress.