FAQ on the US TikTok Ban: What Businesses, Advertisers, and Creators Need to Know

As the US government edges closer to potentially banning TikTok, the fate of one of the most influential social platforms hangs in the balance.

This FAQ addresses the key legal, economic, and operational implications of a TikTok ban. From Trump’s legal maneuvering to advertisers' contingency plans and the platform’s role in social commerce, we break down the critical details and offer clarity on what’s at stake.

Whether you're a marketer planning your next campaign, a brand relying on TikTok Shop, or a creator wondering about the app’s future, this guide aims to answer your most pressing questions.

Potential Deals

What is TikTok’s latest proposal to address U.S. security concerns?

• TikTok CEO Shou Chew recently met with senior White House officials and proposed a joint venture with US investors to oversee its operations in the country.
• The proposed entity would be US-based, with US-based management and a majority of US-based board members, aiming to create greater separation from ByteDance.
• The plan seeks to address national security concerns while allowing TikTok to continue operating without a full divestiture from ByteDance.

Who is interested in acquiring TikTok’s US operations?

• President Trump confirmed that Microsoft is among the companies considering a bid for TikTok.
• Oracle has also emerged as a major contender, reportedly working with outside investors to take control of TikTok’s global operations.
• Perplexity AI has proposed merging with TikTok’s U.S. business, offering the U.S. government up to a 50% non-voting stake in a newly formed entity.

Could the US government buy TikTok?

• President Trump has floated the idea of using a sovereign wealth fund to purchase TikTok outright.
• On February 3, Trump signed an executive order directing the Treasury and Commerce Departments to explore options for creating a government-backed investment fund.
• Trump has stated that the government "could do a partnership with very wealthy people" to acquire TikTok, but no concrete plan has been announced.

How Do Perplexity AI and Oracle Factor into TikTok’s Potential Sale?

Perplexity AI and Oracle are both involved in discussions about TikTok’s future in the U.S., with each proposing different roles in a potential sale or restructuring of the platform.

• The AI company has suggested merging with TikTok’s U.S. business, forming a new entity where ByteDance would retain a minority stake but cede control to a U.S.-based board.
• The deal would exclude TikTok’s proprietary algorithm, meaning ByteDance would no longer influence content recommendations.IPO Component: Perplexity AI envisions an initial public offering (IPO) valued at $300 billion, allowing the U.S. government to acquire up to 50% of the new company as a non-voting stakeholder.

Meanwhile, Oracle is positioned to play a central role in TikTok’s data security and infrastructure.

• Oracle, already TikTok’s US cloud provider, is reportedly negotiating to oversee data collection and software updates.
• A proposed deal would ensure that US investors hold a majority stake, while ByteDance’s involvement remains limited.
• The final terms are still evolving, and discussions continue between TikTok, Oracle, and other interested parties, including Microsoft and Amazon.

What did President Trump say about the potential sale?

• Trump has expressed enthusiasm for a bidding war, stating, “If there’s a bidding war, that’s a good thing.”
• He denied discussing a TikTok deal with Oracle CEO Larry Ellison but acknowledged widespread interest from multiple parties.
• He emphasized that any deal must “benefit the United States” in order for him to support it.

Legal and Political Landscape

What is the current status of the TikTok ban in the US?

• President Trump signed an executive order on Monday, delaying the enforcement of the TikTok ban by 75 days.
• The ban requires TikTok’s parent company, ByteDance, to divest its ownership of the app to a non-Chinese entity to operate in the U.S.
• TikTok briefly went offline over the weekend but resumed operations after Trump’s announcement.
• The Protecting Americans from Foreign Adversary Controlled Applications Act required ByteDance to divest from TikTok by January 19, 2025, or face a nationwide ban.

What does the executive order entail?

• The order directs the attorney general to halt enforcement of the ban temporarily.
• This pause allows time to explore potential solutions, including the sale or restructuring of TikTok’s ownership.
• The executive order is controversial due to legal ambiguity (attempting to override a federal law upheld by the Supreme Court); legal experts note that the order could face significant hurdles, setting a contentious precedent regarding executive power.

Why did the Supreme Court uphold the law on January 17?

• The Court ruled that the law does not violate the First Amendment, applying intermediate scrutiny and deeming the legislation content-neutral.
• The Court cited compelling national security concerns, emphasizing ByteDance’s legal obligations to share user data with the Chinese government under Chinese law.

• The ruling was characterized as a narrow decision, specifically addressing TikTok's ties to China.

What were the key points raised during the Supreme Court hearing on TikTok's future?

National security concerns:

• Chief Justice John Roberts emphasized ByteDance's obligations to assist Chinese intelligence under Chinese law, stating the law does not restrict users’ speech but aims to prevent a “foreign adversary” from collecting data.
• Justice Brett Kavanaugh called the government’s data collection arguments “very strong.”

Free speech implications:

• TikTok’s attorneys argued that shutting down a major speech platform is unprecedented in US history and violates the first amendment.
• Content creators testified that TikTok’s algorithm uniquely enables grassroots audience-building, making it distinct from Instagram and YouTube.
• Justice Ketanji Brown Jackson argued that TikTok’s First Amendment claim might not be valid, suggesting the case is more about TikTok’s association with ByteDance than speech suppression.

What compromise solutions were discussed during the hearing?

• Extended timelines: Legislation allows the president to grant a 90-day extension if ByteDance demonstrates progress toward divestiture.
• Alternative measures: The Court showed interest in addressing national security concerns through data security safeguards rather than full divestiture.
• Separation of issues: Justices signaled support for clearer distinctions between data collection risks and content moderation practices.

Why was the TikTok ban pursued in the first place?

• National security concerns: Lawmakers fear that Chinese national security laws could force ByteDance to share US user data with China’s government.
• Algorithm manipulation: Officials worry about the potential manipulation of public opinion through TikTok’s recommendation algorithms.
• TikTok’s response: TikTok and ByteDance deny these allegations, citing free speech protections under the First Amendment.

How could Trump delay or prevent the ban when he becomes president?

• Non-Enforcement: Trump could direct the Attorney General to avoid prosecuting Apple or Google for noncompliance.
• Reinterpretation: Trump might attempt to redefine what constitutes a "qualified divestiture," potentially allowing ByteDance to retain control under revised conditions.
• Diplomatic negotiation: Trump could explore a direct deal with China to address security concerns without requiring full divestiture.

What role could Attorney General Pam Bondi play in the TikTok ban?

• Pam Bondi declined to confirm whether she would enforce the TikTok ban if the Supreme Court upholds the law, citing pending litigation within the Department of Justice.
• Bondi’s confirmation hearing raised questions about whether enforcement of the law might depend on the incoming Attorney General’s interpretation.

How did TikTok notify users when the app shut down?

• TikTok displayed a pop-up message directing users to a website with information about the ban.
• Users had the option to download their data to retain a record of their personal information.

What is TikTok’s plan for its US employees if the ban is enforced?

• TikTok has assured its 7,000 U.S. employees that their employment, pay, and benefits will remain secure, even if the platform is banned.
• In an internal memo, leadership emphasized that offices will remain open and employees will continue to be supported regardless of the situation.

How were businesses preparing for a potential TikTok ban?

• Many small businesses are shifting to alternative platforms like Instagram Reels, YouTube Shorts, and Snapchat.
• Businesses are focusing on building email lists and customer databases for direct communication.
• Entrepreneurs are downloading and archiving their TikTok content to repurpose it across other platforms.

What impact would a permanent ban have on small businesses and creators?

• TikTok estimates that small businesses could lose over $1 billion per month in revenues if the ban takes effect.
• Creators who rely on TikTok as their primary income source face financial uncertainty.
• While platforms like Instagram Reels and YouTube Shorts offer alternatives, creators highlight that they lack TikTok’s reach and engagement dynamics.

Impact on Advertisers

How is TikTok managing advertiser confidence amid uncertainty?

• TikTok has reassured advertisers that the divest-or-ban law does not impact their ability to run ads on the platform.
• During the brief shutdown, ad performance dropped, but most brands have since resumed campaigns.
• TikTok had previously assured advertisers that it will refund ad spending if the app is banned on January 19.
• TikTok ad sales representatives have encouraged brands to increase their 2025 budgets by up to 40%, signaling the platform's commitment to preserving advertiser relationships despite looming uncertainty.
• Sameer Singh, TikTok’s North American ad chief, recently departed the company, adding an extra wrinkle of concern for advertisers already navigating the potential disruption caused by the ban.

How significant are TikTok's ad revenues in the US market?

• TikTok is projected to generate $15.53 billion in US ad revenues in 2024, accounting for 15.1% of all US social network spending.
• A one-month ban could potentially cause TikTok to lose up to 29% of its global ad revenue target for the year, the company claims.

Which platforms are expected to benefit if TikTok faces a permanent ban?

• YouTube Shorts and Instagram Reels are expected to be the primary beneficiaries of displaced TikTok ad budgets.
• Other platforms, such as Snapchat and even LinkedIn, are also positioning themselves to attract short-form video ad spending.

What are the long-term implications if the ban is not made permanent?

• The ban could reshape the social media landscape, driving advertisers and creators toward other short-form video platforms.
• While ad budgets would shift to competing platforms, TikTok Shop’s unique integration of social commerce may not be easily replicated.
• Advertisers may face challenges maintaining engagement and sales performance on alternative platforms like Instagram Reels and YouTube Shorts.
• A precedent would be set for regulating foreign-owned social platforms in the US.

Small businesses, particularly those relying on TikTok Shop, could face financial setbacks.

What are experts saying about the likelihood of the ban being enforced?

• Legal scholars like Alan Rozenshtein and Stephen Vladeck say the Supreme Court may uphold the law but leave room for presidential discretion in enforcement.
• Experts emphasize that Trump’s intervention, while unconventional, adds political complexity to the case.

Should businesses and creators start preparing now?

• Realistically, they should have started awhile ago. Experts recommend businesses diversify their social media presence, archive TikTok content, and establish email or SMS databases for customer retention.
• Businesses should have contingency plans to shift ad spend and engagement strategies to alternative platforms.

Impact on Consumers

What impact would a permanent ban have on US social commerce growth?

• A TikTok ban would undoubtedly hurt the growth of US social commerce, which grew 26% in 2024 to $71.6 billion, driven heavily by TikTok Shop.
• Sales are projected to rise to $85.58 billion this year and surpass $100 billion by 2026.

If TikTok departs the US, won’t other platforms simply replicate TikTok Shop’s success?

• Facebook and Instagram have historically taken a “half-hearted” approach to integrating shopping into their platforms.
• 53% of US consumers distrust products sold via social platforms, according to Aibuy's 2023 Social Media Shopping Report.
• Many social shoppers prefer to browse on social media but complete purchases on retailer websites due to trust and security concerns.

What are TikTok Shop’s latest global moves in response to the US ban?

• TikTok Shop plans to launch in Mexico next month, inviting merchants with locally registered entities to sell on the platform.
• This follows recent rollouts in Spain and Ireland, signaling ByteDance’s efforts to diversify TikTok Shop’s geographic reach.
• Mexico’s ecommerce market is dominated by players like Mercado Libre, Amazon, Walmart, and Liverpool, offering TikTok Shop plenty of competition in a high-growth growth market.

Sources

Associated Press

CNBC

The Economist

The Information

MediaPost

NPR

Politico

South China Morning Post

Wall Street Journal