Until now we’ve focused our coverage on Localogy Insider and our conversations on This Week in Local on efforts in the United States to “ban” the Chinese-owned short video app TikTok.
U.S. President Joe Biden recently signed into law a bill that requires TikTok’s Chinese owners to sell off its U.S. operation. The law gives TikTok owner ByteDance almost a year to execute a sale. And Biden can grant a 90-day extension, which he would presumably do if a sale were underway but not likely to be completed by the deadline.
There is a whole world out there, And some of it has gone after TikTok for reasons ranging from politics to data security to social concerns.
With exceptions, the countries taking the toughest line against TikTok tend to be autocracies or theocracies. These include the likes of Iran, Afghanistan, Somalia, and Uzbekistan.
India, a democracy, has banned TikTok since 2020. It cites data security concerns as the reason for its ban, although it has previously banned TikTok following a border dispute with China.
Regulate, Not Ban
In Kenya (also a democracy) a petition calling for TikTok’s ban was considered and ultimately rejected. The Kenyan government decided last week that tighter regulation was a better course than banning the app.
The Kenyan effort stemmed from a citizen petition that called for a ban based on inappropriate content, particularly that posted by younger Kenyans. Separately, the country’s interior ministry later weighed in with charges that TikTok was a conduit for propaganda and fraud, as well as inappropriate content, according to Reuters.
The Kenyan Information and Communication ministry recommended to the panel in parliament that has been considering the ban petition to opt to try tougher oversight rather than an outright ban.
“Rather than imposing a ban on TikTok, the ministry proposes adopting a co-regulation model,” the ministry said in an advisory memo to the panel, according to Reuters.
The ban effort failed to rid Kenya of TikTok. Yet it was not entirely fruitless, at least from the petitioner’s perspective. The Kenyan government is proposing a “co-regulation” model that requires TikTok to moderate content to ensure its compliance with Kenyan laws. According to Reuters, TikTok would also be required to file quarterly reports to the government detailing which posts it had removed from the platform.
In the U.S., the effort was directly related to geopolitical tensions between the U.S. and China. Those advocating banning TikTok in the U.S. fear the app would be used (or already is being used) to promote anti-American views and spread misinformation. TikTok, led by 41-year-old U.S. CEO Show Zi Chew, has pushed back against these claims.
And few think TikTok will go away in the U.S., where the app is incredibly popular, including among small business owners. And the U.S. law isn’t even a ban, at least not initially.
Forced Divestment
As noted, the U.S. action is more focused on divestment from Chinese ownership than on eradicating the app.
A ban would kick in if the company is not divested within the allowed time frame. However, there is plenty of time to work out a resolution that doesn’t involve actually banning TikTok in the U.S.
TikTok is taking the effort seriously and has vowed legal action in the U.S. based on freedom of speech grounds.
TikTok has also pointed to the economic impact it has on U.S. small enterprises in its efforts to prevent a ban or forced divestiture. It recently commissioned a study that claims TikTok drives $24.2 billion in economic activity for U.S. SMBs.
Meanwhile, some recent reporting suggests ByteDance would rather shut down TikTok in the U.S. than sell it, assuming it fails to block the divestiture requirement in court, which it seeks to do. Shutting the app down would be an extreme outcome that still strikes us as unlikely. This feels more like posturing. But we will see how this unfolds in the coming months.
If TikTok goes away, it’s unclear how damaging this would be to those who build brands using the attention TikTok generates.
Panelists on the L24 “Where to Invest in Social” panel generally said that even if TikTok does go away in the United States, there are other options (Reels, Shorts). My colleague Mike Boland made a similar point on a recent episode of Localogy’s This Week in Local podcast.
EU Cites Addictive Qualities
Restricting or regulating TikTok seems to be the most common approach. The European Union, for example, has pursued limits on TikTok based not on security grounds but on concerns that it may be addictive.
Several countries also prohibit the app from government devices. Countries taking this measure include Australia, Canada, France, the UK, Norway, and others. Many U.S. states have enacted similar measures.
Even China, where TikTok was invented, places some limits on the app. The app is blocked on foreign devices. This means only the native Chinese version of the app can be used there.
So a few things are clear to us. TikTok is down but not out in the U.S. Also, TikTok’s problems are not just in the U.S. It faces challenges around the globe. Did we mention Kyrgistan?
