TikTok – Natpoint

Company Check : TikTok Finalises Deal Creating New American-Controlled Entity

Posted on 28 January 2026 by Paul Stradling

TikTok has formally completed a deal to split its US operations from its global business, establishing a new majority-American joint venture designed to address long-running national security concerns and prevent the platform from being banned in the United States.

A Long-Running Political And Legal Battle

The agreement, announced on 23 January, brings to an end a legal and political saga that has stretched back several years and repeatedly placed the future of TikTok in the US market in doubt, despite its vast popularity with users, creators, and advertisers.

A Deal Years In The Making

The creation of TikTok USDS Joint Venture LLC follows sustained pressure from successive US administrations over the app’s Chinese ownership and the perceived risk that American user data or content recommendation systems could be influenced by Beijing.

Concerns first surfaced publicly during Donald Trump’s first term in 2020, when he attempted to ban TikTok outright. While that effort failed, scrutiny intensified under President Joe Biden, culminating in legislation passed in 2024 that required TikTok’s Chinese parent company, ByteDance, to sell its US operations or face an effective ban.

That law then set a deadline of January 2025, briefly forcing TikTok offline for US users before enforcement was paused. After returning to the White House, Donald Trump repeatedly extended deadlines while negotiations continued with American and international investors. In September 2025, Trump signed an executive order establishing a framework that would allow TikTok to keep operating in the US if it restructured ownership, governance, and technical controls. The announcement this week confirms that those requirements have now been met.

What The New Joint Venture Looks Like

Under the new agreement, TikTok USDS Joint Venture LLC has been established as an independent entity with majority American ownership and control. TikTok says the joint venture will now be responsible for securing US user data, the US version of the app, and the content recommendation algorithm.

In its official announcement, TikTok said the joint venture had been created “in compliance with the Executive Order signed by President Trump on September 25, 2025”, and that it would allow “more than 200 million Americans and 7.5 million businesses to continue to discover, create, and thrive” on the platform.

ByteDance, TikTok’s China-based parent company, retains a 19.9 per cent minority stake in the new company, below the threshold required to trigger a ban under US law. The remaining ownership is held by a consortium of non-Chinese investors.

Three managing investors, Oracle, Silver Lake, and MGX, each hold 15 per cent stakes. Additional investors include the Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, General Atlantic affiliate Via Nova, and NJJ Capital, the family office of French telecoms entrepreneur Xavier Niel.

Financial terms of the transaction have not yet been disclosed, although US Vice President JD Vance previously suggested the deal valued TikTok’s US operations at around $14bn, a figure that analysts have noted is lower than earlier estimates.

Governance And Oversight

The joint venture will be overseen by a seven-member board of directors, with a majority of American members. TikTok’s global chief executive Shou Zi Chew will remain on the board, alongside senior figures from the investment groups backing the deal.

Independent oversight is built into the structure through the appointment of Raul Fernandez, chief executive of DXC Technology, as chair of the board’s Security Committee. TikTok says this committee will play a central role in ensuring compliance with national security and data protection requirements.

Also, Adam Presser, previously a senior executive within TikTok and TikTok US Data Security, has been appointed as chief executive of the joint venture. Will Farrell, formerly of Booz Allen Hamilton, a major US government and cybersecurity consultancy, will serve as chief security officer.

Data Protection And Cybersecurity Commitments

A central feature of the agreement is the handling of US user data, which has been at the heart of lawmakers’ concerns. TikTok says all US user data will be stored and protected within Oracle’s secure cloud infrastructure based in the United States.

According to the company, the joint venture will operate a “comprehensive data privacy and cybersecurity program” that will be audited and certified by third-party cybersecurity specialists. TikTok says that this programme will adhere to recognised standards including the NIST Cybersecurity Framework, NIST SP 800-53, ISO 27001, and the Cybersecurity and Infrastructure Security Agency’s security requirements for restricted transactions.

In its announcement (in the TikTok online newsroom), the company said the mandate of the joint venture is “to secure US user data, apps and the algorithm through comprehensive data privacy and cybersecurity measures”, while ensuring ongoing accountability through transparency reporting and external certification.

Algorithm Control Moves To The US

The platform’s recommendation algorithm, widely regarded as TikTok’s most valuable and sensitive asset, has been a particular point of contention, i.e., because it determines what content US users see and how information spreads at scale. Under the new structure, the algorithm used for US users will be retrained, tested, and updated using only US user data.

TikTok says this algorithm will be secured entirely within Oracle’s US cloud environment, with ongoing software assurance processes in place. These include regular source code review and validation, carried out with Oracle acting as a “trusted security partner”.

While the algorithm has been licensed to the US joint venture, experts have noted that retraining it exclusively on American data could subtly alter the type of content users see, although the scale and impact of any changes remain uncertain.

Trust, Safety And Content Moderation

Responsibility for trust and safety policies, including content moderation decisions, will now sit with the joint venture rather than TikTok’s global parent. TikTok says this gives the US entity “decision-making authority” over how content rules are set and enforced for American users.

The safeguards introduced under the agreement will not only apply to TikTok itself, but also to other apps operated by the company in the US, including CapCut and Lemon8.

Maintaining A Global Platform

Despite the separation, TikTok has been keen to stress that the platform will continue to function as a global service. For example, an interoperability framework allows US users to interact with creators worldwide, while US-based creators and businesses can still reach international audiences.

Commercial activities such as advertising, marketing, and e-commerce will continue to be supported through TikTok’s global infrastructure, even as core data and security functions are localised within the US.

Political Reaction And Wider Context

President Trump welcomed the announcement, posting on social media that he was “so happy to have helped in saving TikTok”, and publicly thanking Chinese President Xi Jinping for approving the deal.

The White House and China’s embassy in Washington have been contacted by US media for comment, although neither had issued a formal response at the time of writing.

However, the resolution of TikTok’s US situation stands in contrast to developments elsewhere. For example, in Canada, a federal court recently suspended a government order that would have shut down TikTok’s business operations, forcing a fresh national security review and temporarily protecting access for around 14 million Canadian users.

For TikTok, the establishment of TikTok USDS Joint Venture LLC provides regulatory certainty in its most important overseas market, ending years of uncertainty for users, creators, advertisers, and employees. The longer-term implications for how the platform operates, evolves, and competes in the US will become clearer as the new structure beds in.

What Does This Mean For Your Business?

This deal reshapes how TikTok operates in the United States, placing data control, algorithm oversight, and content moderation firmly within a US governed structure while allowing the platform to continue operating at scale. For American regulators, it represents a rare example of a global consumer technology company being forced to localise core technical systems rather than simply make policy assurances. For TikTok, it removes the immediate threat of a shutdown in a market that accounts for more than 200 million users and millions of businesses that rely on the platform for reach and revenue.

The agreement also sets a clear precedent for how national governments may approach foreign owned digital platforms in future. Data residency, third party security audits, and domestic control of recommendation algorithms are no longer abstract policy demands but concrete requirements that companies may be expected to meet. Other technology firms with global user bases will be watching closely to see how rigorously these safeguards are enforced and whether similar frameworks are proposed elsewhere.

For UK businesses, the outcome matters even though the restructuring is US focused. For example, TikTok remains a major marketing, commerce, and discovery platform for British brands, creators, and agencies that depend on its global reach and advertising tools. Any material changes to how the algorithm is trained or moderated in the US could influence wider content trends, advertising performance, and platform strategy internationally, particularly if similar regulatory pressures emerge in Europe or the UK over data protection and platform governance.

It looks as though advertisers, creators, and partners now gain a period of stability after years of uncertainty, but that stability comes with closer scrutiny of how TikTok balances growth, safety, and regulatory compliance. The platform now appears to have secured its position in the US for the time being, but the structure of the deal makes clear that access to major markets increasingly depends on transparency, technical controls, and political acceptability as much as user growth or innovation.

News : New Sora 2 Creates Incredible Videos

Posted on 8 October 2025 by Paul Stradling

OpenAI has launched Sora 2, a powerful new AI model for generating realistic video and audio, alongside a companion app called Sora that functions as a short-form video platform in the style of TikTok.

Cameos

The app, now live in the US and Canada, allows users to create, share, and remix AI-generated videos featuring themselves and their friends through a feature called “cameos”.

OpenAI’s Move Into Social Apps

This marks OpenAI’s most significant step yet into the consumer social media space. While its ChatGPT platform has seen widespread adoption for productivity, the launch of the Sora app brings the company into direct competition with TikTok, Instagram Reels, and Meta’s new “Vibes” AI video feed.

Makes Short, Realistic Videos

The Sora app, available now for iOS on an invite-only basis, is designed around the idea of co-creation. For example, users can ask (prompt) Sora 2 to generate short, realistic videos with audio, then choose to insert themselves or others into the scenes using cameos. A one-time video and audio recording is required to activate this feature, verifying both identity and likeness.

Once uploaded, users can choose who may include their cameo in videos and revoke permission at any time. OpenAI says the app is designed to prioritise creativity and collaboration, rather than passive consumption. “We think a social app built around this ‘cameos’ feature is the best way to experience the magic of Sora 2,” the company stated in its launch blog.

What Can Sora 2 Do?

Sora 2 builds on the original Sora model released in February 2024, offering major improvements in physical realism and control. For example, the system now better obeys the laws of physics and can simulate complex multi-step actions, such as backflips, Olympic gymnastics, and buoyancy-based movements. It can also handle failure more realistically. For example, as OpenAI explains, “In Sora 2, if a basketball player misses a shot, it will rebound off the backboard,” thereby contrasting with earlier models that might teleport the ball into the hoop to satisfy a prompt.

The model can also generate sound effects and dialogue that synchronise with the visuals, and it supports different styles such as cinematic or anime. Sora 2 is also better at keeping things the same from one part of a video to the next, so people, objects, and scenes look consistent and don’t suddenly change or disappear.

Crucially, Sora 2 allows direct injection of real-world people or objects into generated videos. This is the basis for the cameos feature, which lets users appear in AI videos with recognisable facial likenesses and voices after completing the verification process.

A Social App Built Around AI Creativity

Inside the Sora app, users can browse a TikTok-style vertical feed where all content is generated by Sora 2. The feed’s algorithm is powered by OpenAI’s own language models and incorporates user activity, location, and engagement signals. Users can opt out of sharing data from their ChatGPT history, and parental controls allow for the disabling of infinite scroll, personalisation, and direct messaging.

The Sora feed has a different set of priorities than many existing social platforms. For example, according to OpenAI, the app has been explicitly designed to maximise creativity over time spent. Videos from friends or creators users have interacted with are prioritised, and content is recommended based on what the system believes users may want to remix or be inspired by.

OpenAI is also keen to highlight the fact that many early testers inside the company described the experience as a new way to communicate, i.e. beyond texts, emojis, and even voice notes. As the team says, “We all had a blast with it. It kind of felt like a natural evolution of communication”.

Safety And Moderation

It should be noted that the app includes several layers of moderation and safety, particularly around the use of likenesses, minors, and synthetic content. Videos with cameos include visible watermarks and embedded provenance data using C2PA standards. Also, only users with explicit permission can create content featuring another person’s cameo, and content involving under-18s is subject to stricter controls.

OpenAI says that a dedicated moderation team will review flagged videos, especially in cases involving bullying or misuse of likeness, and that it has developed a “new class of recommender algorithms” that can be instructed via natural language and will regularly poll users about their wellbeing to inform feed adjustments.

Reassuringly, it seems that parents will also have access to management tools via ChatGPT’s parental control features, which allow them to restrict viewing time and disable certain app capabilities.

Growing Interest

Despite being invite-only, the Sora app quickly topped the iOS App Store in the US following launch. According to Appfigures, it saw around 164,000 downloads in its first two days, suggesting strong early interest in AI-generated social video.

For individual users, the draw is clear, i.e. Sora offers a fast, no-equipment way to create and share realistic, creative videos. For businesses, Sora 2 may open up new workflows for marketing, campaign testing, training content, and generating creative ideas, all using synthetic media that’s watermarked and traceable.

It’s no surprise, therefore, that the model is already being explored for potential commercial uses. With this in mind, ChatGPT Pro users can access a higher-quality version called Sora 2 Pro on sora.com, and an API is planned, which would allow integration with third-party tools and platforms.

However, the move into social territory has also brought new scrutiny. Deepfake concerns, synthetic voice misuse, and intellectual property violations are all emerging challenges. OpenAI has already faced criticism from rights holders about the model’s ability to generate copyrighted characters or likenesses without permission. CEO Sam Altman recently responded on X (formerly Twitter), saying the company will move towards an opt-in model for characters and explore revenue sharing with rights holders.

Competitors And The AI Market

By launching its own social platform, OpenAI is taking a risk by entering a space dominated by highly entrenched players. That said, even though Meta’s “Vibes” feed, launched a week earlier, performs similar functions inside its Meta AI app, Sora goes further by integrating first-party video generation with a standalone app, a social graph, and content provenance controls.

Google is also moving rapidly in this space with Veo 3, which may bring advanced video generation tools to YouTube. However, OpenAI’s decision to bundle generation, remixing, social sharing, and personalised feeds into one app gives it a distinct early advantage.

Some would say, however, that the bigger prize here is data. For example, with Sora, OpenAI can gain access to a stream of video-based user interactions that could help refine future models, and reinforce its competitive position in the multimodal AI arms race.

Criticisms And Limitations

Although OpenAI has taken steps to address known risks, the Sora app is not without controversy. For example, some experts have raised concerns about likeness abuse, moderation gaps, and legal grey areas around synthetic content. Others are questioning whether the app’s feed algorithm, even if not optimised for time spent, could still encourage addictive behaviour.

Questions have also been raised about monetisation. For example, OpenAI says the app is free for now and that the only current revenue plan is charging for extra video generations during high demand. However, given the costs involved, a longer-term model will be needed. Sam Altman has indicated that monetisation will be transparent and designed to align with user wellbeing, but the details remain unclear.

As with other AI content tools, regulatory challenges will likely follow. For example, EU regulators, privacy watchdogs, and copyright bodies are expected to monitor Sora closely, especially if it expands into new regions or gains widespread use among teens and creators.

What Does This Mean For Your Business?

What happens next will depend on how well OpenAI manages the tensions between innovation, safety, and long-term sustainability. Sora has been built to showcase Sora 2’s technical strengths, but its future will depend just as much on how responsibly it operates as a platform. The company’s decision to emphasise provenance, permissions, and moderation from the outset suggests it has learned from previous criticism, but the real tests will come as usage scales and more complex edge cases arise.

For UK businesses, Sora introduces a fast, low-friction way to prototype video content, develop ideas, and test audience engagement using synthetic media. Creative agencies, marketers, educators and internal comms teams may all find practical value in exploring what this kind of AI generation can offer. That said, legal departments, compliance leads and brand managers will need to engage early. Controls around likeness, IP, and data use must be fully understood before models like Sora 2 are deployed commercially, especially in regulated sectors.

Broadly speaking, this release positions OpenAI not just as a model developer but as a direct provider of consumer experiences. This puts it on a collision course with existing social media and content platforms, and means its moderation policies, data practices and monetisation plans will face far more public and regulatory scrutiny. If OpenAI can maintain trust while building momentum, Sora could redefine how people create and interact with video. If not, it risks repeating the mistakes of the platforms it seeks to improve upon.

Company Check – Trump Says Microsoft in Talks to Buy TikTok

Posted on 5 February 2025 by Paul Stradling

U.S. President Donald Trump has said that Microsoft is in talks to acquire TikTok, the popular social media platform owned by China’s ByteDance.

In a news conference, President Trump suggested that multiple bidders are interested, stating, “There’s great interest in TikTok” and indicating that a competitive bidding process could be on the horizon. The comments come as the app faces ongoing regulatory pressure in the U.S. due to national security concerns.

TikTok, which has around 170 million users in the U.S., was briefly taken offline earlier this month after a law came into effect requiring ByteDance to either sell its American operations or face an outright ban. However, President Trump intervened by signing an executive order delaying the enforcement of this law by 75 days, allowing negotiations to continue. Microsoft has yet to comment publicly on the talks, while TikTok and ByteDance have also remained silent on the latest developments.

This isn’t the first time Microsoft has been in the frame to acquire TikTok. Back in 2020, the company was one of the leading contenders when Trump, during his first term, sought to force a sale of TikTok’s U.S. operations due to national security concerns. At that time, Oracle and Walmart were also involved in negotiations, though no deal was ultimately reached. Now, with Trump back in office, Microsoft has once again emerged as a potential buyer.

Other parties are also making moves. AI startup Perplexity AI has reportedly submitted a revised bid to merge with TikTok in a deal that would give the U.S. government up to 50 per cent ownership of the newly formed entity. Under the latest proposal, the U.S. government would receive its stake following an initial public offering (IPO) valued at a minimum of $300 billion. Perplexity has revised its offer based on feedback from the Trump administration, suggesting the White House is actively involved in shaping potential acquisition deals.

Trump has previously floated the idea of other high-profile bidders, including Tesla CEO Elon Musk and Oracle Chairman Larry Ellison, taking over TikTok. However, Musk has yet to publicly express any interest, while Oracle’s role remains unclear. Trump recently told reporters, “I’ve spoken to many people about TikTok, but not with Oracle.” Meanwhile, billionaire Frank McCourt has also made a formal offer for the platform.

The next 30 days could be pivotal for TikTok’s future in the U.S., with Trump indicating that discussions are ongoing and a decision is expected soon. With national security concerns cited as being at the heart of the issue, ByteDance remains under pressure to divest its American operations. Whether Microsoft, Perplexity AI, or another bidder ultimately secures control remains to be seen, but the stage is set for a high-stakes battle over one of the world’s most influential social media platforms.

Tech News : Net Neutrality (and TikTok) Bans Likely Lifted

Posted on 8 January 2025 by Paul Stradling

Recent developments in US tech policy have halted the return of net neutrality rules and put the looming TikTok ban on pause, thereby raising significant questions about internet governance, corporate power, and digital rights.

What Is Net Neutrality?

Net neutrality, the principle that internet service providers (ISPs) must treat all data equally, ensures that ISPs cannot prioritise, throttle, or block access to specific websites or online services based on their content, source, or payment arrangements. It is designed to maintain an open and fair internet, where all users and businesses have equal access to information and services, regardless of their size or resources.

A Saga of Reversals

Although net neutrality has been a cornerstone of digital fairness debates, its history in the US to date has unfortunately been marked by policy reversals tied to political administrations. For example, under the Obama administration, the US Federal Communications Commission (FCC) classified ISPs as telecommunications services, thereby subjecting them to stringent neutrality rules. This decision was then reversed under Trump-era FCC Chairman Ajit Pai, who championed deregulation. Next, the Biden administration attempted to reinstate neutrality rules, but recent judicial developments have derailed these efforts.

What’s Happened Now?

On 2 January 2025, the US Court of Appeals for the Sixth Circuit upheld its stay on the FCC’s Safeguarding and Securing the Open Internet Order. The court essentially ruled that ISPs are classified as ‘information services’, thereby exempting them from net neutrality regulations. The decision leaned heavily on the 2024 Supreme Court ruling ending the Chevron deference principle, which previously required courts to defer to agency interpretations of ambiguous laws. The Sixth Circuit’s decision concluded that the FCC lacked statutory authority to reimpose neutrality rules.

“We hold that Broadband Internet Service Providers offer only an ‘information service,’ and therefore, the FCC lacks the statutory authority to impose its desired net-neutrality policies,” stated the court order. This effectively nullifies the FCC’s authority to enforce net neutrality under current legislation.

Implications for Internet Users and Businesses

The absence of net neutrality rules ushers in an unregulated internet landscape. It means that ISPs can now legally prioritise or throttle specific traffic, potentially leading to a tiered internet where services like video streaming or cloud computing are accessible only to those who can pay premium fees. For businesses, particularly small enterprises, this raises concerns about equitable access to online resources, such as reliable video conferencing platforms for remote work or affordable e-commerce tools essential for reaching customers. The disparity could stifle innovation and hinder the competitiveness of smaller players.

The latest judgment also means that larger corporations with deep pockets may find it easier to secure prioritised bandwidth for their services, leaving smaller firms struggling to compete. Also, consumers could face higher costs for accessing content and services without the assurance of unbiased treatment by ISPs. Critics argue that the lack of neutrality poses a risk to free speech, as ISPs gain more control over the flow of information.

Brendan Carr To Champion Deregulation (and More ISP Freedom)

Brendan Carr is the person set to assume the role of Federal Communications Commission (FCC) Chair (replacing Jessica Rosenworcel) on 20 January 2025, coinciding with President-elect Donald Trump’s inauguration. In the US, Mr Carr is known for his strong support of market-driven approaches to internet regulation. He is also known for consistently arguing that innovation and progress are best achieved through competition and minimal government intervention, rather than through federal regulations like net neutrality. It seems likely, therefore, that under his leadership, the FCC will give ISPs more freedom to manage their networks as they see fit, reinforcing the current administration’s deregulatory agenda.

TikTok Ban in Limbo

At the same time a court has just ruled that ISPs are again exempt from net neutrality regulations, it seems that TikTok still faces a perhaps precarious future in the US. The Protecting Americans from Foreign Adversary Controlled Applications Act (set to take effect on 19 January 2025) requires ByteDance, TikTok’s Chinese parent company, to sell the app or face an outright ban. Proponents of the law cite national security concerns, alleging that TikTok could be used by the Chinese government for data collection or propaganda. However, the issue has become a flashpoint for debates on free speech and economic competition.

Ban Delayed

In what some may see as a surprising move, President-elect Donald Trump has requested that the Supreme Court delay the implementation of the ban. Trump’s lawyers argue that the timing of the ban, coinciding with his inauguration, complicates his ability to negotiate a resolution. The filing notes that Trump has 14.7 million TikTok followers, which he views as critical for political engagement and freedom of expression.

Civil Liberties Groups Have Also Challenged TikTok Ban

It’s also worth noting here that the Electronic Frontier Foundation (EFF), a nonprofit organisation dedicated to defending civil liberties in the digital world, has criticised the US government’s case against TikTok in a supporting brief. The EFF argues that the government “has not presented credible evidence of ongoing or imminent harm caused by TikTok.” This is a sentiment echoed by other civil liberties groups, including the American Civil Liberties Union, which contend that the government’s claims rely on speculative threats rather than concrete evidence. Both organisations warn that banning TikTok without sufficient justification could set a troubling precedent, potentially undermining free speech and digital rights.

Hearing 10 January

The US Supreme Court is set to hear arguments on 10 January, and its decision will likely determine TikTok’s fate in the US. If the court grants a pause, the new administration could explore alternative solutions, such as data localisation or third-party audits, to address security concerns while preserving the app’s availability.

The Broader Implications of Both

The developments in both net neutrality and TikTok’s future could be regarded as a reflection of broader tensions in tech governance. For example, whereas the rollback of neutrality rules highlights the growing influence of corporate interests in shaping internet policy, the TikTok case highlights the complex interplay between US national security, free speech, and global economic competition.

Turning Point?

For consumers and businesses alike, these decisions could represent a turning point. Without neutrality protections, the internet risks becoming a space where access and quality are dictated by financial clout. Also, the TikTok debate raises questions about how governments can balance security concerns with the rights of users and companies in a globalised tech ecosystem.

As the dust settles, the outcomes of these cases will likely influence not only US policy but also the global discourse on digital rights and internet regulation. Both issues serve as reminders of the profound impact legal and political decisions have on the digital lives of billions.

What Does This Mean For Your Business?

The recent rulings on net neutrality and the TikTok ban highlight the evolving and often contentious landscape of internet governance (in the United States). Both cases show the delicate balance policymakers must strike between fostering innovation, protecting national security, and upholding the principles of fairness and free expression.

The decision to block the return of net neutrality appears to signal a significant shift towards a market-driven internet, with ISPs gaining greater autonomy in how they manage their networks. While proponents argue this could spur innovation and competition, critics warn that it risks creating inequities that could disadvantage smaller businesses and marginalised users. The absence of regulation raises the spectre of a tiered internet, where those with financial resources receive preferential access, potentially stifling competition and undermining the democratic ethos of an open web.

Meanwhile, the debate over TikTok highlights the complexity of addressing security concerns in a globalised tech environment. While the app’s Chinese ownership has sparked legitimate fears about data privacy and propaganda, the lack of concrete evidence has raised concerns about overreach and the potential suppression of free speech. Also, President-elect Trump’s intervention introduces a political dimension to the debate, with his own social media presence on TikTok cited as a key consideration. The upcoming Supreme Court decision will be pivotal, not just for TikTok’s future in the US, but for the precedent it sets in handling foreign-owned platforms.

At their core, both cases illuminate the growing tension between corporate and governmental power in the digital age. The rollback of net neutrality highlights the influence of corporate interests on internet policy, while the TikTok ban raises questions about the extent to which governments should intervene in the digital economy. Together, these developments both highlight the profound implications of regulatory decisions on the digital lives of billions.

As these stories unfold, the outcomes will undoubtedly shape the trajectory of internet governance in the US and elsewhere. They serve as a reminder that the policies we adopt today will have far-reaching consequences, influencing not just the accessibility and fairness of the digital landscape but also the broader principles of freedom and equity in the information age.

Tech News : TikTok Loses Appeal Against Sell-or-Ban Law

Posted on 11 December 2024 by Paul Stradling

A U.S. federal appeals court has upheld a law requiring ByteDance, TikTok’s China-based owner, to sell the platform by 19 January 2025 or face a nationwide ban.

Understanding the Legislation

This decision to reject TikTok’s appeal against the original decision of the court intensifies the ongoing debate over national security concerns and the influence of foreign-owned applications on American users.

What Law?

The law in question, known as the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), was signed into law by President Joe Biden on 24 April 2024. PAFACA aims to prevent foreign adversaries from accessing sensitive data of U.S. citizens through software applications under their control. Specifically, it requires companies like ByteDance to either divest their ownership in applications operating within the United States or cease operations entirely.

The legislation actually identifies ByteDance and TikTok by name, thereby reflecting bipartisan concerns in the U.S. over potential national security threats posed by foreign-controlled apps, i.e. Chinese apps.

The Key Fears Behind The Law

Essentially, the PAFACA legislation that TikTok has fallen foul of stems from concerns in the U.S. that the Chinese government could exploit TikTok to gather data on American users or manipulate content to influence public opinion.

Dating back to the previous Trump presidency, U.S. officials have expressed fears that TikTok’s extensive data collection practices could provide the Chinese Communist Party with access to sensitive personal information, thereby potentially posing a significant national security risk.

The fear is that ByteDance’s ties to China could make TikTok susceptible to coercion by the Chinese government, potentially leading to espionage or propaganda dissemination.

These concerns have been compounded by China’s national security laws, which could compel Chinese companies to share data with the government upon request.

TikTok Owned By A Chinese Company

TikTok, with over 170 million users in the United States, has become a focal point of this legislation due to its ownership by Chinese company ByteDance. Despite TikTok’s assertions that it operates independently and stores U.S. user data on servers located outside of China, lawmakers clearly remain unconvinced.

Events Leading to the Original Ban Decision

The journey towards this latest legislative action began during the first Trump administration, which attempted to ban TikTok in 2020, citing national security concerns. However, these efforts were stalled by legal challenges, and the ban was never fully implemented. Under the Biden administration, scrutiny of TikTok persisted, culminating in the enactment of PAFACA in April 2024. Following the law’s passage, TikTok and ByteDance filed a lawsuit challenging its constitutionality, arguing that it infringed upon the free speech rights of American users and amounted to an unconstitutional bill of attainder.

Appeals Court Ruling

However, on 6 December 2024, the U.S. Court of Appeals for the District of Columbia Circuit unanimously upheld the law, rejecting TikTok’s arguments. The court stated that the legislation was “carefully crafted to deal only with control by a foreign adversary” and was part of a broader effort to counter a “well-substantiated national security threat posed by the PRC (People’s Republic of China).” The ruling emphasised that the government’s concerns about potential data access and content manipulation by the Chinese government were persuasive and justified the law’s enactment.

The Implications for TikTok and the Social Media Landscape

The appeals court’s decision now places TikTok at a real crossroads. If ByteDance doesn’t divest its ownership (sell TikTok off) by the 19 January 2025 deadline, TikTok will face a ban in the U.S. anyway. This scenario will, of course, lead to significant upheaval in the social media market. For example, competitors like Meta’s Instagram, Google’s YouTube, and Snap’s Snapchat may stand to benefit from TikTok’s potential absence, as users and content creators seek alternative platforms. However, replicating TikTok’s unique algorithm and user experience also presents challenges, and a ban could disrupt the livelihoods of many creators and small businesses that rely on the platform.

What Has TikTok Said?

In response to this latest ruling, TikTok (ByteDance) has announced plans to appeal again, this time to the U.S. Supreme Court, asserting that the law is based on “inaccurate, flawed, and hypothetical information” and that a ban would essentially censor U.S. citizens. The company expressed hope that the Supreme Court would protect Americans’ right to free speech in this significant constitutional matter.

Complicated By Politics

The political landscape adds another layer of complexity. President-elect Donald Trump, who is set to be inaugurated on 20 January 2025, has previously indicated opposition to a TikTok ban, despite attempting to implement one during his first term. It, therefore, remains unclear whether he will act to prevent the ban from taking effect, but any intervention would require navigating strong bipartisan concerns in Congress regarding national security and foreign influence.

What Does This Mean For Your Business?

The battle over TikTok highlights the challenges of trying to balance national security concerns with protecting free speech and supporting businesses in today’s connected digital world. The U.S. government’s demand for ByteDance to sell TikTok reflects growing fears about foreign-controlled technology companies, particularly those linked to China. At the same time, TikTok’s importance to millions of users and businesses can’t be ignored, thereby creating a complex situation with no easy answers.

The court’s decision to uphold the law signals that the U.S. is now willing to take strong action to limit foreign influence in technology, even if it disrupts the market and affects consumers. If TikTok’s appeal to the Supreme Court fails, its potential ban in the U.S. could create some major changes in social media. While rivals like Meta and YouTube may benefit, recreating TikTok’s unique algorithm and appeal won’t be simple. Many creators and small businesses that depend on TikTok could face serious challenges if the platform disappears.

For businesses that have embraced TikTok as a key part of their marketing and outreach strategies, this development could be highly disruptive. TikTok’s sophisticated algorithm has enabled brands to target audiences with unmatched precision, driving engagement and sales in ways other platforms struggle to replicate. A ban could leave businesses scrambling to find alternative platforms, many of which lack the same audience reach or content features that make TikTok so effective.

Small businesses, in particular, may feel the strain, as many have used TikTok to build their brand visibility with limited budgets. Losing access to the platform would mean rethinking marketing strategies, potentially investing in new campaigns, and navigating unfamiliar tools. This could also lead to increased competition on other platforms, driving up advertising costs as businesses flock to alternatives like Instagram Reels, YouTube Shorts, and Snapchat.

However, the situation highlights the importance of diversification. Businesses reliant on TikTok should, if they haven’t already done so, begin exploring other platforms and spreading their efforts to ensure they are less vulnerable to the fate of a single app. A proactive approach could help businesses weather any potential disruptions while positioning them for future growth.

Adding to the uncertainty of TikTok’s future is the recent major change to the political landscape, i.e. Trump winning the U.S. election. President-elect Donald Trump has said he opposes a TikTok ban, despite trying to implement one during his first term. Whether he will act to prevent the ban when he takes office remains unclear, and he would need to address strong bipartisan concerns in Congress about national security.

This ongoing saga could be viewed as an example of the tension between globalisation and protecting national interests. As the 19 January 2025 deadline nears, the final outcome for TikTok will not only affect its users and creators but could also set a precedent for how governments handle foreign technology in the future.

Featured Article : TikTok Termination?

Posted on 13 March 2024 by Paul Stradling

A recent US congressional vote means that TikTok and its parent company’s alleged ties with the Chinese Communist Party must be severed within six months or the popular TikTok app must be sold, thereby banning it in the US.

The Vote

The unanimous Energy and Commerce Committee vote (50-0) in favour of forcing TikTok’s parent company ByteDance to divest itself or sell the app could see 170 million American users no longer able to use TikTok. There is now a wait to see whether the US Senate approves the measure before it becomes law. The stated purpose of the bill (as it stands) is to “protect the national security of the United States from the threat posed by foreign adversary controlled applications.”

Chinese Links

The worries that ByteDance’s links to the Chinese state make TikTok’s usage in the US a threat to national security date back to the Trump presidency. Back in 2020, (then) President Donald Trump tried to ban the app but was blocked by the courts. It was part of a wider trade and political war with China which is still carrying on. Other apps with links to China banned by Trump in 2021, for example, included the Ant Group’s Alipay mobile payment app, QQ Wallet, WeChat Pay, CamScanner, SHAREit, Tencent QQ, VMate (published by Alibaba Group subsidiary UCWeb), and Beijing Kingsoft Office Software’s WPS Office.

Bans In Many Countries

The ban on TikTok was extended to number of other institutions and countries including:

– The European Commission, the UK government (and the BBC), the US government banned the TikTok app from staff devices, to protect sensitive personal data, increase cybersecurity, protect against misinformation, and to protect national security.

– In June 2020, India banned TikTok and around 300 other Chinese apps from government devices.

– In 2023, the TikTok app was banned from government devices in Australia and Canada.

– Other countries with a government device TikTok ban also include Taiwan, Ireland, Denmark, and Belgium.

Many may also remember how, in March last year, the CEO of TikTok, Shou Chew, had to appear before the House Energy and Commerce Committee in the US to discuss concerns about TikTok’s consumer privacy, data security practices, its impact on children, and the app’s alleged links to China.

This Time

This time, however, rather than facing just a government device ban, TikTok is facing a whole country ban. Worse than that, it’s the country with TikTok’s largest audience, with estimates ranging around 113.3 million to 116.5 million users.

The stark choice facing ByteDance is to now either sell the TikTok app within 6 months (thereby severing alleged links with the Chinese state) or face removal from mobile app stores in the US, effectively wiping out its biggest audience, threatening the app itself.

What Would A Ban Mean?

Looking at the broader picture, Banning TikTok in the US completely could have a significant impact on several fronts, given the app’s massive user base and economic influence in the country. Some of the potential effects could include :

– Massive user impact (businesses and home users). With millions of active users in the US, a ban would abruptly cut off access for a large community of creators and viewers. It would affect the way people consume and create short-form video content, potentially shifting these users to alternative platforms.

– A blow to the creator economy. Many US-based content creators rely on TikTok for income through brand partnerships, sponsored content, and the app’s creator fund. A ban could disrupt this economy, affecting the livelihood of thousands of influencers and content creators.

– A significant effect on market competition and innovation. For example, TikTok’s absence could create a vacuum in the social media landscape, encouraging competitors like Instagram Reels, YouTube Shorts, and Snapchat to fill the gap. This could lead to innovations within these platforms as they vie for the TikTok audience.

– Trouble for advertisers (brands). Brands that leverage TikTok for marketing and customer engagement would need to pivot their strategies to other channels. This could reshape digital marketing trends and impact the effectiveness of social media campaigns.

– More regulations. Heightened awareness and concerns over data privacy and security issues related to social media, could lead to more stringent regulations and policies affecting all platforms, not just TikTok.

– Effects on international relations. Given the geopolitical tensions underlying concerns about TikTok’s Chinese ownership, a ban could have diplomatic repercussions, influencing US-China relations (making them even worse) and possibly affecting American companies operating in China. Some commentators have already suggested we are witnessing a kind of ‘cold war’ with China now anyway, with the US restricting things like microchips and other components in a bid to perhaps stifle the growth of what it sees as a more powerful and growing economy.

– Legal and political ramifications. Implementing a ban would likely involve legal challenges and a complex regulatory process. It could set a precedent for how the U.S. government addresses concerns about foreign-owned technology companies in the future.

All in all, therefore, the impact of a TikTok ban in the US would extend well beyond the app itself, affecting the social media ecosystem, the digital economy, and even international relations. However, the specific outcomes would depend on a variety of factors, including how such a ban is implemented and the response from users, creators, businesses, and other stakeholders.

User Revolt Reported In The US

Not surprisingly, there have been reports in the US of congressmen being inundated with calls from TikTok users objecting to a ban. It’s also been reported that TikTok encouraged its users to call their representative to vote against the measure.

Criticisms

The vote and proposed ban have led to other criticisms, including that from The American Civil Liberties Union (ACLU) which pointed to the app’s value to many Americans for information and communication, and describing the ban as a “cheap” political point scoring measure in an election year.

What Does TikTok Say?

TikTok has said (on the ‘X’ platform) that it amounts to “an outright ban” and that “This legislation will trample the First Amendment rights of 170 million Americans and deprive 5 million small businesses of a platform they rely on to grow and create jobs”.

What Does This Mean For Your Business?

The potential total ban of TikTok in the US represents a pivotal moment not only for the app’s parent company (ByteDance) but also for a broad spectrum of stakeholders ranging from individual creators to large corporations. For ByteDance, the forced sale or severance of its largest international market could significantly impact its valuation, strategic direction, and global influence.

The loss of the US market (TikTok’s largest) would not only diminish its advertising revenue but could also deter potential investors and partners concerned about the platform’s stability and future growth prospects.

For businesses and creators that rely on TikTok, the ramifications could be profound. The US, for example, is home to a significant creator economy where individuals and businesses leverage TikTok for brand building, audience engagement, and revenue generation. A ban would necessitate a strategic move to alternative platforms, which may not offer the same level of engagement or demographic reach as TikTok. This could disrupt marketing strategies, content distribution plans, and income streams for countless users.

The competition within the social media landscape would most likely intensify in the wake of a TikTok ban. Rivals such as Instagram Reels, YouTube Shorts, and Snapchat stand to gain the most, absorbing TikTok’s displaced user base – the US may not be too unhappy about US-based company apps taking TikTok’s place. This shift could spark a wave of innovation as platforms vie to capture and retain these new audiences, potentially reshaping the social media ecosystem.

From a broader economic perspective, a TikTok ban could have ripple effects beyond well the tech industry. The platform has become an integral part of digital marketing strategies for many businesses of all sizes. The disruption to these strategies could have downstream effects on sales, customer engagement, and brand loyalty across various sectors.

Also, the ban could bring about stricter regulatory scrutiny over social media platforms, leading to increased compliance costs and operational challenges. This heightened regulatory environment could stifle innovation and deter investment in the tech sector, impacting the wider economy.

The implications of a US-wide TikTok ban could, therefore, extend way beyond the app itself, affecting the livelihoods of creators, the strategies of businesses, the dynamics of social media competition, and the broader digital and national economies. Stakeholders will now, most likely, closely monitor developments and prepare should the worst happen. TikTok has held firm and denied any Chinese state links before. Nevertheless, the US is making a powerful statement with the unanimous vote and bill proposing a possible total ban which reflects the strength of resolve now in the US. It also reflects their willingness to pile-on the pressure in what is also a political battle with what they consider as a major rival.