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By Sheila Dang and Jaspreet Singh
(Reuters) – The U.S. Supreme Court on Friday rejected TikTok’s request to block a possible ban on the app, ruling that TikTok has stopped working for 170 million Americans.
The ban is the end result of the 2024 National Security Act, which requires TikTok parent ByteDance to sell the popular short video app or face closure in the United States on January 19.
It is unclear how long the ban will last, as President-elect Donald Trump, who took office on Monday, said he would try to find a “political solution” to keep the app running in the United States.
On Sunday, Trump tweeted, “Save TikTok!” He said.
This is what is happening now.
What will happen to the application?
New users cannot download TikTok from the Apple (NASDAQ:) and Google (NASDAQ:) app stores, and existing users cannot update the app, as the law prohibits any party from downloading or modifying TikTok. Application.
It was not immediately clear whether TikTok’s business partners, including Oracle (NYSE: ), which provides TikTok’s cloud infrastructure services and stores its US user data, have terminated their services.
TikTok plans to continue paying its 7,000 employees in the US, company management said in an internal memo.
How are users affected?
TikTok’s 170 million users in the US can’t use the app even if they haven’t deleted it from their phones.
Until Sunday, US users were unable to access TikTok through virtual private networks, or VPNs, which can hide a user’s Internet Protocol or IP address and thereby their location.
Other Chinese social media apps, such as RedNote, known in China as Xiaohongshu, are expected to continue to gain popularity among American users.
Content creators who have built businesses from their TikTok followers are urged to seek out their followers on alternatives like Instagram and YouTube.
What do advertisers do?
Advertisers have rushed to prepare contingency plans ahead of the ban, fearing that a shutdown could jeopardize their campaigns across platforms. One marketing executive described it as a “hair on fire” moment for the advertising world, saying that after months of conventional wisdom, a solution to getting a short video app up and running would emerge.
TikTok continues to tease advertisers about new features, including the beta launch of a tool that makes it easier to create, edit and add ads in bulk.
The ban will put more than $11 billion in U.S. advertising investment up for grabs.
“Wall Street will be watching Meta (NASDAQ:), Snap and others to see who benefits from this rapid spending shift,” said Craig Atkinson, CEO of digital marketing agency Code3.
What will happen to US-China trade relations?
The ban on TikTok could exacerbate trade tensions between the US and China, which have been tense since exports of advanced US semiconductor technology to Beijing.
However, “it’s no surprise that such a ban has been under discussion for five years,” said Sean Ennis, a professor at the University of East Anglia (NYSE: ).
Trump may try to use executive action to protect TikTok, which has been in power for four years, but could use it to reverse his stance and extract something meaningful from China, analysts at LightShed Partners said.
Analysts say reversing the ban could give Trump some bargaining power with China.
Who are the potential buyers?
He has repeatedly said that he cannot sell TikTok from ByteDance.
This did not oblige Frank McCourt, the billionaire businessman who owned the Los Angeles Dodgers baseball team. His combination values the app at around $20 billion without the algorithm.
Other media reported that Chinese officials are discussing the possibility of selling Tik Tok’s US operations to billionaire Elon Musk, a major backer of Trump.
TikTok called those reports “fiction.”
Hours before the ban took effect on Saturday, US search engine startup Perplexity AI submitted a bid to merge with TikTok’s US operations, a source familiar with the matter said.
