What’s next? TikTok ban is scheduled to go into effect on Jan. 19 unless SCOTUS 1) rules in favor of TikTok, or 2) grants a temporary injunction.
The court is widely expected to rule against TikTok, experts and prediction markets agree.
Why it matters: A ban on TikTok would have a major impact on creators, influencers, consumers, and U.S.-China relations. Whether you’re a trader, market observer, or an influencer concerned about their TikTok income.
How are the results verified: On Kalshi, the verifying body will be the Library of Congress. On Polymarket, the primary resolution source will be information from the US federal government, along with a census of credible reports.
What the market says: Right now, a ban on TikTok is looking increasingly more likely at some point over the next year. ByteDance, TikTok’s parent company, must sell the company by Jan. 19, 2024, coincidently the day before President-elect Donald Trump moves into the White House.
The ongoing debate over TikTok in the United States is spurred by national security concerns, data privacy, and geopolitical tensions between the US and China. TikTok is owned by the Chinese company ByteDance and has rapidly grown into one of the world’s most popular social media platforms, particularly among Gen Z.
Typically, the U.S. government has protested when other countries ban U.S.-based apps or companies. So, if there’s a way to address our concerns about national security short of a ban, I would think that those are good reasons to at least consider that. We don’t want to be in the position of ‘do as we say, not as we do. – Timothy Edgar
TikTok ain’t going away. There is no more capitalistic entity than an organization controlled by the Chinese Communist Party. They’re going to sell it. – Senator Tim Kaine
“ByteDance doesn’t have any plans to sell TikTok.” – ByteDance (April 26, 2024)
Ex 3:
If you’re betting on this event and it resolves in May 2025 or later, you’ll want to keep tabs on the election. The subject has turned highly partisan, and billionaire TikTok investor Jeff Yass is a major donor to the Trump/Vance ticket and other Republican-friendly PACs.
“TikTok is about free speech and innovation, the epitome of libertarian and free market ideals. The idea of banning TikTok is an anathema to everything I believe,” Yass argued last year.
Meanwhile, a Harris administration is more likely to follow Biden’s lead in cracking down on the China-owned tech company.
The situation could resolve in a few different ways: TikTok could win its lawsuit and continue operations as usual, ByteDance might sell TikTok’s U.S. operations, or TikTok could be shut down in the U.S. The outcome will depend on the legal proceedings and ByteDance’s actions in the coming months. Beyond that, there are other interests and factors at play, such as the presidential election and the state of US-China relations, which could grow ever more hostile if China invades Taiwan.
Whether you think TikTok should or shouldn’t be banned doesn’t really matter. What matters most, currently, is the legal cases for and against the ban.
The main legal arguments for a ban on TikTok in the United States are centered around national security concerns and the potential influence of the Chinese government. Here are the key points:
1. National Security Concerns: The U.S. government argues that TikTok poses a national security threat due to its ties to China. The concern is that the Chinese government could potentially access the data of American users or use the platform for propaganda purposes. This argument is based on the premise that China’s national security laws could compel ByteDance, TikTok’s parent company, to hand over data to the Chinese government.
2. Data Security Risks: The government maintains that there are significant risks associated with the data practices of TikTok, which could lead to unauthorized access to sensitive information. This concern is heightened by the fact that TikTok’s algorithm and software updates are controlled by ByteDance, which is based in China.
TikTok is challenging the U.S. ban in court with several key arguments:
4. Lack of Evidence for National Security Risks: TikTok argues that the government has not provided concrete evidence of the app being used for espionage or propaganda by the Chinese government. The company suggests that the concerns could be addressed through less restrictive means.
6. Impracticality of Divestiture: The company argues that divesting from ByteDance within the timeline is not realistic commercially, technologically, or legally. TikTok maintains that such a divestiture would disrupt its business model and user base.
