The TikTok Deadline Approaches
The TikTok clock is officially ticking in the US.
Last Friday (January 10), the social media app’s lawyers tried to convince US Supreme Court justices to either strike down or temporarily block a law that could lead to TikTok being banned from the market if its Chinese owner ByteDance fails to sell the app in the US by January 19.
The Supreme Court’s Decision
Today (January 17), the Supreme Court announced its decision: the law will be upheld, meaning TikTok’s US operations must be sold to avoid being shut down in the market where it matters—170 million users.
You can read the court decision completely here.
Information reported on Tuesday that TikTok is preparing to shut down immediately in the US on Sunday (Jan. 19), the day the law takes effect.
President-elect Donald Trump is reportedly mulling an executive order to temporarily suspend the law.
The proposed suspension – for 60 or 90 days – would give the Trump administration time to find a buyer for TikTok’s US operations or find another solution. Washington Post reported on Wednesday (January 15).
Trump’s inauguration is scheduled for January 20.
The Protecting Americans from Apps Controlled by Foreign Adversaries Act, which takes effect on Jan. 19, targets apps owned by companies in countries the U.S. considers security threats. President Joe Biden signed the law into effect in April 2024.
TikTok has been cited as a legal issue, with US lawmakers warning that TikTok may be sharing sensitive user data with the Chinese government. TikTok denies these claims.
Last month, US lawmakers warned Google and Apple that they must prepare to remove TikTok from their app stores by January 19, 2025, if its China-headquartered parent ByteDance does not sell the platform by that date.
While existing users may continue to use the app for some time, it may eventually become dysfunctional in the market.
During two hours of oral arguments last Friday (Jan. 10), TikTok’s lawyers failed to convince the Supreme Court that imposing the law would violate its First Amendment free speech rights.
The court also heard from TikTok’s lawyers about the challenges of breaking up the TikTok app in the US without the recommendation algorithm that powers TikTok worldwide.
The app’s recommendation algorithm powers the “For You” feed that ByteDance and TikTok describe as “one of the defining features of the TikTok platform.”
ByteDance previously stated that it had no plans to sell the platform in the US, with or without the algorithm, but that didn’t prevent formal offers from coming in ahead of the January 19 deadline.
Last Thursday (January 9), Project Freedom, founded by billionaire entrepreneur Frank McCourt, formally executed what the organization calls “The People’s Bet” on TikTok, stating its aim to relaunch the platform on “new American-made digital infrastructure.”
Project Freedom announced on Thursday that it has the “financial capacity to complete the transaction,” including “expressions of interest from investors, such as large private equity funds, family offices, and high net worth individuals, for adequate equity capital.” It also claims to have access to debt financing from “one of the largest banks in the world.” United States.
McCourt from Project Liberty also mentioned that it has “extensive support from leading legal and financial advisors with vast experience in executing complex, high-stakes transactions in accelerated timeframes.”
“We have put forward a proposal to ByteDance to implement Project Liberty’s vision for a reimagined TikTok built on an American-made technology stack that prioritizes people,” stated Frank McCourt, founder of the Freedom project.
“By backing the platform, not relying on TikTok’s current algorithm, and avoiding a ban, millions of Americans will be able to continue using the platform. We look forward to collaborating with ByteDance, President-elect Trump, and the new administration to finalize this deal.”
Elsewhere this week, Bloomberg reported that tech billionaire Elon Musk could potentially save the app.
According to reporting from Bloomberg on Monday (Jan. 13), citing sources: “Chinese officials are evaluating a potential option involving Musk acquiring TikTok’s U.S. unit if the app is banned.”
Bloomberg added that “it is unclear whether the multi-billionaire, TikTok, and ByteDance have had any discussions.”
In response to the report published by Bloomberg, a TikTok spokesperson stated: “We cannot be expected to comment on pure fiction.”
