Everything you need to know about the TikTok ban — and why it might not even matter. 

TikTok ban getty ck

Now that President Biden has signed off on legislation mandating the sale of TikTok by its parent company, ByteDance, a myriad of complex legal, regulatory and market challenges emerge. This mandated divestiture is poised to be one of the most significant and contentious technology transactions in recent years. 

Valuation and market constraints 

ByteDance, a juggernaut in the digital world, is valued at approximately $225 billion. This places TikTok, one of its premier assets, in a valuation stratosphere that only a few can afford.  

Analysts estimate that the U.S. operations of TikTok could command a price in the tens of billions of dollars, making it an acquisition target for only the most financially robust entities. However, the financial capacity to acquire such a valuable asset is just the tip of the iceberg. 

Antitrust concerns 

The obvious play for a TikTok acquisition would be an existing American tech giant such as Meta (formerly Facebook) and Google. These companies naturally come to mind due to their financial resources and strategic interests in social media and technology — one of them acquiring TikTok would be the gem in their crown.  

But it’s not going to happen because of existing antitrust scrutiny. The Federal Trade Commission and the Department of Justice are increasingly vigilant regarding any acquisitions that could further consolidate power within the technology sector. An attempt by these companies to acquire TikTok would trigger a remarkably robust antitrust review, which could (and should) block the acquisition on the grounds of preserving competition in a market that is already far too anticompetitive.  

Strategic fit and regulatory approval 

Even if a financially capable and strategically aligned company outside of the usual tech giants were interested, the sale would face significant regulatory hurdles.  

Any prospective buyer would need to navigate a labyrinth of national security reviews, potentially under the Committee on Foreign Investment in the United States (CFIUS), which has already been involved in scrutinizing ByteDance’s operations as they relate to data security and user privacy. The new owner would need to demonstrate the capability to protect U.S. user data from foreign exploitation – a tall order that narrows the field of suitable candidates. 

As attorney April M. Gilmore points out, “That’s going to take an exclusively or predominant American ownership group and one capable of enduring and passing more than an insignificant amount of congressional scrutiny as to the group’s ability to keep the new TikTok in the national interest.” 

International trade and political pressures 

The mandated sale of TikTok is not merely a business transaction but a significant international trade and geopolitical issue.  

With U.S.-China relations already strained, the divestment of such a high-profile and strategically important asset from a Chinese company will surely have serious diplomatic repercussions, affecting negotiations and trade relations. Any potential buyer would have to consider the international political climate and the possibility of retaliation against American firms operating in China. 

This is a point that won’t get as much press as it deserves. I have lived in Beijing and understand how political messaging works in China and can assure you that the forced sale of TikTok will be met not only with economic reprisals but with very competent domestic and international messaging from China, which will have some weighing whether the forced sale of TikTok was actually worth it. Just don’t be surprised when this happens. 

Where we go from here — the inevitable legal challenges 

We can expect a mountain of things legal, including a challenge from the ACLU, which has railed against the forced sale as a restriction of speech.  

Any sale of TikTok is going to be fought in the courts for years. That means both the people who love to use the app for fun as well as those influencers and others who generate revenue from the app can take a breath, and be reasonably confident that while massive powers fight this all out, TikTok is still going to work and be updated in the U.S.  

That doesn’t mean that the end result won’t be eventual forced divestiture — maybe it will be. But one of the cool things about the way social media works is that it’s driven by need. If it looks like TikTok is nearing the end of the road, people will find other ways and other spaces to do what they want to do and create what we want to consume.  

I am very confident that the way TikTok’s proponents have wrapped use of the app in constitutionally guaranteed free speech means it’s going to take a long time for courts to successfully separate TikTok from what it stands for — if this can even be done at all.  

Aron Solomon, JD, is the chief strategy officer for Amplify. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world.  

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