If you use TikTok in your business operations, you are likely already aware of the recent legislation threatening to shut it down in the US. If you aren’t, you should be. The legislation, signed into law on April 24, could have serious impacts on TikTok users, creators, and business owners.

In this article, we discuss the current (and always changing) state of the potential TikTok ban as well as when you might be impacted as a business owner. Then, we discuss how to minimize the risk these changes pose to your company.

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What Is the TikTok Ban in the US?

Going back to 2020, multiple US administrations have discussed or pursued banning or limiting TikTok use in the United States. While most of these efforts fell flat, some made progress. Notably, the US banned TikTok use on government employees’ phones or government devices on December 30, 2022. Several states have tried to implement their own bans, but these have been challenged in court.

Recently, however, the situation has come back into public view with the passing and signing of the Protecting Americans from Foreign Adversary Controlled Applications Act on April 24, 2024, by President Joe Biden.

“According to the US government, foreign-owned social media platforms can pose national security concerns.”

Why the US has sought to ban TikTok

Why have multiple administrations sought to ban TikTok? According to the US government, foreign-owned social media platforms can pose national security concerns. They are specifically concerned about social media platforms owned by companies from countries deemed to be adversaries.

TikTok, which is owned by the China-based parent company ByteDance, falls under this category. The US government has stated that they are concerned the Chinese government could use TikTok to gather data on American users, potentially creating a national security risk. They are also concerned that TikTok could be used to spread misinformation or propaganda or otherwise influence public opinion in a way that favors adversaries.

For their part, TikTok dismisses these concerns. They claim they have never received a request for data from the Chinese Communist Party. Nevertheless, the US government is not convinced.

Understanding the recent TikTok ban legislation

The recently passed TikTok bill is the most serious effort yet at banning the TikTok app. It is also the most successful, with potentially serious ramifications.

Specifically, the bill requires that ByteDance sell TikTok to an entity deemed non-adversarial within nine months. The US president could extend this timeline by three months if a sale is in process. The federal government feels that separating TikTok from an adversary-affiliated organization would protect US national security in the long term.

If ByteDance were to sell, much work would need to be done to find an appropriate buyer. Both the US government and Chinese government would likely need to give their assent to the deal. Given their less-than-ideal relations, this could prove quite challenging.

“Legal challenges, in theory, could potentially overturn or otherwise block the legislation.”

TikTok’s response to US legislation

As can be expected, TikTok has struck a defiant tone in response to the legislation. They claim the bill tramples on the US Constitution and free speech rights. Accordingly, they have indicated that they will not sell the app to placate the US government.

Importantly, ByteDance and TikTok have indicated that they plan to fight the legislation in court. They subsequently sued the US government to block the recent TikTok ban. Chinese authorities have also indicated they would oppose the sale.

At the least, these steps could cause significant delays in the planned implementation of the bill. Legal challenges, in theory, could potentially overturn or otherwise block the legislation.

When Would the TikTok Ban Take Effect?

According to the recently passed TikTok bill, TikTok must sell to an approved entity by January 19, 2025. The bill leaves the possibility for the deadline to be extended by an additional 90 days per presidential approval.

Of course, this timeline is far from clear. As mentioned, ongoing legal challenges could significantly delay the bill from going into effect. In the event the legislation is overturned by the courts, the ban may be delayed indefinitely.

“According to the recently passed TikTok bill, TikTok must sell to an approved entity by January 19, 2025.”

How the TikTok Ban Could Impact Your Company

The TikTok ban is a big deal in the business world, with potentially far-reaching consequences. For starters, there are thousands of creators and influencers who could see their livelihoods disappear overnight if the bill takes effect.

As a business owner, you could see considerable disruption if the ban goes forward. This is in part due to the fact that TikTok can serve many different important business roles, including:

• Marketing channel
• Sales platform
• Customer service channel

The more reliant your business is on TikTok, the more disruptive future changes could prove for you.

“The TikTok ban is a big deal in the business world, with potentially far-reaching consequences.”

Marketing channel

Let’s start with marketing. TikTok has quickly grown to be an extremely valuable marketing tool. Given its place as one of the most popular social media platforms in the United States (particularly among younger generations), TikTok provides businesses with the ability to reach a vast network of new customers. Further, adept users can do so without the need to spend huge sums of money, making it a valuable tool for smaller and newer businesses.

If your marketing efforts rely heavily on TikTok, your business could take a large hit if the ban comes into effect. Overnight, one of your most productive marketing channels could vanish, potentially taking your business with it. Preparing for this eventuality could make the difference between failure and survival for your company.

“If your marketing efforts rely heavily on TikTok, your business could take a large hit if the ban comes into effect.”

Sales platform

With the launch of TikTok Shop, the company became much more than a social media company. Now, many businesses rely on TikTok’s ecommerce platform for a substantial portion of their sales. Indeed, some ecommerce businesses sell exclusively on TikTok.

If you are an ecommerce company that sells directly on TikTok, your revenue and profits could take a significant hit when the ban comes into full force. The more your company relies on TikTok as a sales channel, the more you could be impacted.

Customer service channel

As a social media platform, TikTok provides an unprecedented opportunity to connect and communicate with your audience and customers. As a result, many companies have come to use TikTok as a vital customer service tool.

Customers can DM businesses with questions about their products or to ask about specific orders. Businesses can respond and interact with their customers with a more personal feel compared to traditional customer service methods.

Of course, companies that rely on TikTok to handle their customer service needs will be impacted if the ban is implemented. As with other areas, planning ahead can help to mitigate the damage your business experiences as a result of the ban.

“The best thing you can do to minimize your risk is to plan ahead as if the ban will come into effect.”

How to Minimize Platform Risk If Your Company Relies on TikTok

While the TikTok ban could be quite disruptive to your business, you aren’t defenseless. You may be tempted to wait and see how the situation plays out in court in the hope that the ban gets overturned or is otherwise derailed. However, waiting could put you in a risky position if the lawsuit to stop the ban fails.

The best thing you can do to minimize your risk is to plan ahead as if the ban will come into effect. When doing so, there are several things you can do to adequately prepare for any scenario. These steps include:

• Assess your risk
• Grow alternative marketing channels
• Pursue alternative sales channels
• Stay informed of future changes
• Start now

Assess your risk

The first step is to assess how your company would be impacted if the TikTok ban takes effect. Are you currently using TikTok for your business operations? If so, in what ways? For example, are you using it for your marketing efforts, or are you using it as an ecommerce platform, or both? If you are using it either for marketing or as an ecommerce platform, what percentage of your sales come from TikTok?

Clearly, the more your business relies on TikTok, the more risk you incur from a potential shutdown. If you only sell your products on TikTok Shop, a shutdown would be catastrophic. On the other hand, if only 5 percent of your sales come from TikTok, your business will suffer less from a shutdown.

Once you have assessed your risk or exposure to a TikTok shutdown, you can take action to mitigate the potential damage.

Grow alternative marketing channels

If your business utilizes TikTok as a marketing channel, you may want to consider diversifying your marketing efforts away from the platform. Again, this depends on how much of a role TikTok plays for your brand.

If the vast majority of your marketing success comes from TikTok, you have a greater need to diversify your operations. This could include building your presence on other social media platforms like Instagram or Facebook. At the same time, you may want to consider exploring content marketing, affiliate marketing, paid advertising, and more.

Over time, these efforts can help your business become less reliant on TikTok for your marketing success. If the TikTok ban is averted, you will still come out ahead, as these new channels can drive additional revenue. In the event TikTok is shut down, you will enable your business to survive and thrive in the new landscape.

Pursue alternative sales channels

If your business sells exclusively on TikTok Shop or is heavily reliant on it, adding alternative platforms or points of sale is crucial. Failing to do so could be ruinous for your business if TikTok is truly banned. On the flip side, implementing additional sales channels can help to boost your revenue and profits even if the ban doesn’t happen.

If you haven’t already, consider launching your products on Amazon. While this does take some work, it gives you access to a huge pool of potential buyers. At the same time, you may want to consider launching your own online store (think Shopify, etc.) to sell directly to your customers.

If your TikTok sales represent a smaller portion of your total overall sales, you may still want to consider bolstering your other online stores. By doing so, you can increase your sales and revenue while you mitigate risk—a win-win scenario.

Stay informed of future changes

As we mentioned, the future of TikTok is still quite uncertain. It could become inaccessible to Americans due to the ban, or the ban could fall apart under legal scrutiny. Potential administration change in the interim introduces even more uncertainty.

Given the uncertain state of play and the huge ramifications of an eventual ban, it is important to stay up to date on the situation as it unfolds. As the story develops, business owners across the country will be able to get a better feel for the likelihood that the ban will come into effect.

“Given the uncertain state of play and the huge ramifications of an eventual ban, it is important to stay up to date on the situation as it unfolds.”

Start now

Any changes you make to your marketing or sales efforts will take time to bear fruit. For example, if you plan to launch your products on Amazon, it can take some time to have your product shipped to the appropriate fulfillment center, build your product pages, and launch. From there, it can take even more time for your products to gain traction and begin to sell well. Likewise, newly launched marketing channels can take some time to generate real results for your company.

If you disregard the recent ban and wait until the last moment to mitigate risk, it will be too late. Start implementing changes now so that your business is in a more secure position if and when the ban comes into effect.

“If you disregard the recent ban and wait until the last moment to mitigate risk, it will be too late.”

Conclusion

Much uncertainty remains about the new TikTok ban. Will it pass legal scrutiny and come into effect, or will it be retracted? If it does pass legal scrutiny, will it be delayed, or will it be implemented in early 2025?

At present, nobody knows the answers to these questions. What we do know is that if it does come into effect, it will have far-reaching consequences for any business that relies on the app. To mitigate these risks for your business, it is important that you act now, analyze your risks, and take the appropriate steps to diversify your operations.