Tickity Tokity for TikTok

We’re sure you’ve heard a lot about TikTok since it has been all the rage this year. With its trendy dances, tutorials on how to make whipped coffee, and DIY tips and tricks to turn your van into a home – it’s the platform Gen Z has their eyes glued on. A variety of brands, ranging from HP, Chipotle, Spikeball, to Sabra Hummus, have hopped on the TikTok train to advertise and grab the attention of their younger audience. In the last month, there have been a lot of rumblings around TikTok. Is it being banned in the United States? Is it secure? What’s the real issue with it? It’s been a little confusing to follow, so we’ve provided a quick breakdown of how TikTok came to be and where it might be going.

In 2014, a short-form video streaming and sharing app, Musical.ly, was created where its users created entertaining videos by lip syncing to music and dialogue. It became very popular and led to the rise of content creators and social media influencers. In August 2018, Musical.ly was taken over by a privately held Chinese internet company, ByteDance, and its users were moved to TikTok. Since its launch, TikTok has grown to be one of the most popular social platforms among the Gen Z group and has more than 2.3 billion downloads to date with almost 100 million users in the US alone. (For comparison, Instagram has ~107 million active users in the US.)

In recent news, Trump and his administration have become increasingly concerned that the Chinese government could get access American companies’ information and TikTok users. Although TikTok has denied being under Beijing’s influence, some believe it still poses a potential threat to our national security so the app should be banned from the states. Some are wondering if the Trump administration has the authority to do this? In short, yes. The International Emergency Economic Powers Act (IEEPA) allows the White House to address national security concerns by intervening in economic markets, so long as the actions are tied to formally declared emergencies. This could put ByteDance on a list that prevents American companies from selling goods to it without a license. The decision of whether or not Trump and his administration can continue to pursue the IEEPA has been under review.

When the Trump administration announced concerns in early-August, ByteDance offered to sell the American operations of the app to stop the administration from banning TikTok all together. The President imposed a firm deadline of September 15th for a deal to be sealed. Since then, there has been talk of Microsoft buying up to 30 million dollars worth of operations, where it would run TikTok in the US, Canada, New Zealand and Australia. As of September 13th, there have been talks that the software company, Oracle Corp., will be announced as TikTok’s tech partner in the US instead. However, the transaction structured is still unclear and the White House has not officially signed off on the deal.

If a deal doesn’t pan out, an executive action to ban TikTok will likely face critical legal and political consequences. It could pressure ByteDance to sell elsewhere, which will have a huge impact on the social media industry. Specifically, in regards to marketing, Gen Z influencers and competition with other social media giants such as Facebook, Instagram and Google. In any case, a lot is still up in the air!

We will be watching the future of TikTok carefully so be on the lookout for updates on social media and through our Marketing Minutes.

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