On Friday, Jan. 17, the Supreme Court released its opinion upholding the ban against TikTok. The social media giant must divest its Chinese ownership or cease operations in the United States by Jan. 19.
Kalshi’s odds of a TikTok ban before surged from 57% to 85% following the decision. Polymarket concurred with an 84% chance of a TikTok ban.
In the weeks leading up to the Supreme Court hearing, Kalshi’s $1.5 million market showed increasingly high chances of a ban taking place. The case originated with a bipartisan bill, so the headwinds against TikTok were powerful.
Analysts outside of prediction markets don’t see a path forward for TikTok to remain active in the United States, either. Congressional action, executive orders, and posturing won’t keep TikTok in the American market. Distributors face staggering fines if they allow users to access TikTok through services like the App Store or Google Play Store.
This makes it all Trump and the GOP's ball game.
— Kate Klonick (@Klonick) January 17, 2025
There are (at least) five likely possible outcomes:
1) No one does anything, the ban stands and TikTok is banned in the US.
2) Congress acts to pass a new law repealing the TikTok law (not going to happen).
1/ https://t.co/s6rcQB9KZ3
What happened and what’s next
Why TikTok sued the U.S. government: In 2024, Congress passed a bipartisan bill that would require TikTok’s parent company, ByteDance, to divest from TikTok or face a ban in the United States. ByteDance and a group of TikTok content creators filed separate lawsuits against the U.S. government. The Supreme Court consolidated those two cases together and heard oral arguments on Jan. 10.
Why the U.S. wants to ban TikTok: The Chinese government makes private companies comply with state interests. If the government wants TikTok’s data on American users’ locations or wants to control the algorithm that recommends content, then TikTok must turn over the data. U.S. lawmakers view that vulnerability as a national security issue.
What kind of data risk is TikTok: The Supreme Court opinion stated that if “a user allows TikTok access to the user’s phone contact list to connect with others on the platform, TikTok can access ‘any data stored in the user’s contact list,’ including names, contact information, contact photos, job titles, and notes.’ Access to such detailed information about U.S. users, the Government worries, may enable ‘China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.”
Why the Supreme Court allowed the TikTok ban: In a rare 9-0 decision, the Supreme Court upheld the ban-or-sale bill. TikTok argued that banning it in the United States violated its First Amendment rights to free speech. However, the data vulnerabilities have nothing to do with the app’s content. So, the Supreme Court was free to weigh American security interests against free speech concerns.
What happens to TikTok now: On Sunday, internet companies will face fines for each user who can access TikTok through the App Store or Google Play Store. TikTok will still be available on devices it was downloaded onto before the ban deadline, but it will no longer receive updates. Over time, it will become increasingly unusable.
Can TikTok still avoid a ban: To avoid a ban, ByteDance would have to divest from TikTok in the next two days. The Trump administration could also decline to enforce the fines the ban imposes. Finally, Congress could reverse the ban before prediction markets settle. These are long shots but not impossible, leading to ban chances in the mid-80s instead of the high-90s.
