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TikTok Resumes Operations in the U.S. Amid Uncertainty Over Future Ownership





The Big Picture


TikTok, the popular video-sharing app owned by Beijing-based ByteDance, is back online in the U.S. after temporarily shutting down over compliance issues with federal laws targeting its Chinese ownership. The app’s future remains in limbo as questions about its ownership and security persist.


Key Developments

Why Did TikTok Shut Down?

TikTok faced a January 19 deadline to divest its Chinese ownership or face a de facto ban in the U.S. This was driven by federal legislation citing national security concerns, particularly fears that the Chinese government could access American users' data or manipulate TikTok's content algorithms. The law prohibits companies like Apple, Google, and Oracle from supporting the app unless it meets ownership requirements.

Why It Resumed Operations?

TikTok resumed service after receiving assurances from former President Donald Trump, who promised to extend the compliance deadline and shield service providers from penalties. TikTok said it had sufficient clarity to restore operations, ensuring continued access for its over 170 million U.S. users.


Legal and Legislative Context

The Role of U.S. Law

The legislation requiring TikTok to sever ties with its Chinese owners has bipartisan support and was upheld by the Supreme Court. Although Trump issued an executive order extending compliance timelines, Republican lawmakers have argued that the law leaves no room for extensions. Senators Pete Ricketts and Tom Cotton emphasized that TikTok can only operate legally in the future if ByteDance complies with divestiture requirements.

Ownership Proposals

Trump has proposed a joint venture where the U.S. would hold a 50% ownership stake in TikTok, allowing ByteDance to maintain partial involvement. This plan remains unclear, as TikTok’s current ownership structure already includes substantial non-Chinese investors like BlackRock and General Atlantic.


Business and Political Implications

Trump’s Changing Stance

Despite initial efforts to ban TikTok during his first term, Trump recently expressed support for the app, where he has a significant following. The shift may be linked to concerns about competition; Trump has criticized Facebook owner Meta for potentially benefitting if TikTok is banned.

China’s Reaction

China has voiced opposition to any forced sale of TikTok, emphasizing that such decisions require Beijing’s approval. However, Chinese officials have hinted at a more flexible approach, suggesting companies should make independent decisions about operations.


What’s Next?


TikTok’s fate hinges on whether ByteDance can comply with U.S. legal requirements or negotiate a deal to sell its American operations. Any changes will likely face scrutiny from both U.S. lawmakers and Chinese regulators, making a resolution uncertain.


For now, TikTok remains a key player in the U.S. social media landscape, but its long-term viability depends on navigating this complex legal and political landscape.


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