May 30, 2024

What does the looming TikTok ban mean for smaller business?

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March 23, 2023, Rayburn House Office Building. TikTok CEO Shou Zi Chew testifies during the House Energy and Commerce Committee hearing titled 'TikTok: How Congress Can Safeguard American Data Privacy And Protect Children From Online Harms'.

Picture by: Wikipedia

On April 24, US President Joe Biden signed a billoutlining measures to force TikTok’s Chinese owner company, ByteDance, to sell the app within 270 days or risk it being banned, leaving small businesses fearful about the future.

The bill was passedby the Senate just the day before, promptedby data protection fears, specifically that ByteDance could share US data with the Chinese government. It was part of a foreign aid packageof other measures which included a total of $95bnin aid to Ukraine, Israel, Gaza and Taiwan.

ByteDance has remained adamantthat it “does not have any plans to sell TikTok”.

Both of the major parties supported the bill. Republican Senator and chairman of the US Senate Select Committee on Intelligence, Marco Rubio, said that “for years, we’ve allowed the Chinese Communist Party to control one of the most popular apps in America… A new law is going to require its Chinese owner to sell the app. This is a good move for America.”

Senator Mark Warner, a Democrat from Virginia, meanwhile stated that “the idea that we would give the Communist Party this much of a propaganda tool, as well as the ability to scrape 170 million Americans’ personal data, is a national security risk”.

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According to a report by Oxford Economics, in 2023 TikTok contributed more than $24bn in gross domestic product (GPD) and supported 224,000 jobs in America.

Almost 40% of small or midsized businesses say they rely on TikTok in order to be able to keep running. A ban could put a huge number of businesses at risk and threaten thousands of jobs.

Despite these potential consequences, 79 Senate members voted for the ban with only 18 against it.

Statistics from BackLinko claim that TikTok currently has over 1bn monthly active users, meaning that out of the 5.07bn social media users, 19.7% use TikTok in some way. Adult Americans spend an average daily screen time of 55.8 minutes on TikTok.

Small to medium-sized businesses use TikTok to promote their products, with a recent survey by Statista finding that over 38% of social media marketing professionals had planned last year to increase their usage of TikTok for promotional campaigns.

In a new leap by the company, the TikTok Shop feature, which began testing in the US in November 2022, is another way that TikTok facilitates e-commerce – though it is only available in Southeast Asia, the US and the UK. Product Showcase is another in-app feature that allows potential buyers to easily shop for items within a seller’s account.

Shou Zi Chew, Singaporean CEO of TikTok since 2021, responded to the US bill in a TikTok video saying “make no mistake, this is a ban. A ban on TikTok, and a ban on you and your voice… The facts and the Constitution are on our side… We have invested billions of dollars to secure your data and keep our platform free from outside manipulation.”

On May 7, TikTok sued the US government over the potential ban, stating Congress has ‘taken the unprecedented step of expressly singling out and banning TikTok’ and that it is ‘unconstitutional’.

Many countries such as France, Ireland, the UK and India have already imposed regulations on app usage, ranging from banning TikTok on devices of government employees to having a complete nationwide ban for all citizens.

So, what’s next? To avoid being banned, ByteDance must sell the app within the next nine months. If it doesn’t, TikTok will be deleted from US devices.

Investors such as former Trump administration Treasury Secretary Steven Mnuchin and Canadian businessman Kevin O’Leary have already shown interest in buying the app, but ByteDance has no shown no interest in selling.

Written by:


Noah Saphier


New Jersey, United States of America

Born in 2007 in New Jersey, Noah Aaron Brühl Saphier studies in Englewood New Jersey, United States of America. He is interested in journalism, science, sports, and history. For Harbingers’ Magazine, he writes about sports, exploration, and global conflicts.

In his free time, Noah plays tennis and the violin, learns about exploration in the ocean and space, and travels. Noah speaks English, Spanish, and German.

Edited by:


Camilla Savelieva

Economics editor

United Kingdom


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