Written by Sheela Dang and Jaspreet Singh
(Reuters) – The TikTok app stopped working for 170 million Americans late on Saturday after the U.S. Supreme Court ruled on Friday against TikTok's attempt to avoid a ban that could lead to the app being shut down.
The ban is the end result of 2024 legislation passed over national security concerns that called for ByteDance, TikTok's parent company, to sell or shut down the popular short-form video app in the United States on January 19.
It is still unclear how long the ban will remain in place, as President-elect Donald Trump, who takes office on Monday, has said he will try to find a “political solution” to the issue to keep the app running in the United States.
“Save TikTok!” Trump said Sunday on Truth Social.
Here's what's happening now.
What happens to the application?
New users will not be able to download TikTok from Apple (NASDAQ:) app stores and existing users will not be able to update the app, because the law prohibits anyone from facilitating the download or maintenance of TikTok. to request.
It was not immediately clear whether TikTok's business partners, including Oracle (NYSE:), which provides cloud infrastructure services for TikTok and stores US user data, had suspended services.
TikTok plans to continue paying its 7,000 employees in the United States, company leadership said in an internal memo.
How will users be affected?
TikTok's 170 million US users can't use the app even if they haven't deleted it from their phones.
As of Sunday, American users who were hoping to access TikTok through virtual private networks, or VPNs, which can mask a user's Internet Protocol, or IP, address and thus their location, were unsuccessful.
Other Chinese social media apps, such as RedNote, known in China as Xiaohongshu, are expected to continue to gain more attention among American users.
Creators who have built businesses from their followers on TikTok have urged their followers to find them on alternatives like Instagram and YouTube.
What will advertisers do?
Advertisers rushed to prepare contingency plans ahead of the ban, fearing that the closure would jeopardize their campaigns on platforms. One marketing executive described it as a “hair on fire” moment for the advertising world, following months of conventional wisdom that a solution would materialize to keep the short-form video app running.
TikTok has continued to push advertisers with new features, such as launching a tool in a test form that will make it easier to create, edit, and add ads in bulk.
The ban puts more than $11 billion in annual advertising investments in the United States up for grabs, according to forecasts by marketing group WARC Media.
“Wall Street will be watching the results of Meta (NASDAQ:), Snap and others to see who will benefit from this rapid shift in spending,” said Craig Atkinson, CEO of digital marketing agency Code3.
What happens to US-China trade relations?
A TikTok ban could exacerbate trade tensions between the US and China that were already tense following export restrictions on advanced US semiconductor technology to Beijing.
However, Sean Innes, a professor at the University of East Anglia, said such a ban would not be surprising as it has been under discussion for five years.
Analysts at LightShed Partners said Trump may try to use executive action to protect TikTok throughout his four years in office, but he could exploit the risk of a change in position to extract something meaningful from China.
Analysts say that repealing the ban could give Trump some negotiating power with China.
Who are the potential buyers?
TikTok has repeatedly said it cannot be sold from ByteDance.
But that did not deter billionaire businessman Frank McCourt, former owner of the Los Angeles Dodgers baseball team. His consortium values the app without the algorithm at about $20 billion.
Other media reported that Chinese officials are in talks about the possibility of selling TikTok's US operations to billionaire Elon Musk, a major financial backer of Trump.
TikTok described those reports as “fiction.”
Hours before the ban went into effect on Saturday, US search engine startup Perplexity AI submitted an offer to merge with TikTok's US operations, according to a source familiar with the matter.
