The Supreme Court upholds the U.S. TikTok ban, which means businesses that have used the app to reach and grow audiences will no longer be able to do so.
Small businesses stand to feel the greatest effect from the end of TikTok's U.S. operations, scheduled to take effect Jan. 19 after the Supreme Court upheld the app's ban Friday.
After hearing oral arguments both for and against the TikTok ban, the Supreme Court decided to uphold the Protecting Americans From Foreign Adversary Controlled Applications Act, signed into law by President Joe Biden in March 2024. Unless TikTok's Chinese owner, ByteDance, sells to a U.S.-based buyer, companies that offer the popular social media platform via their app stores will be penalized for carrying and updating TikTok once the ban starts.
The Supreme Court decided that the law's targeted focus on divesting TikTok from a foreign adversary and preventing China from "accessing the sensitive data of 170 million U.S. TikTok users" doesn't directly regulate speech or content and does not violate First Amendment rights.
"There is no doubt that, for more than 170 million Americans, TikTok offers a distinctive and expansive outlet for expression, means of engagement, and source of community," the Supreme Court's opinion said. "But Congress has determined that divestiture is necessary to address its well-supported national security concerns regarding TikTok's data collection practices and relationship with a foreign adversary."
While President-elect Donald Trump could potentially intervene, it's unclear how much influence he might have over lifting the ban, given that he will be inaugurated on Monday after the ban takes place.
The fallout will mostly affect small companies that have used TikTok to reach and grow audiences, said Ash Johnson, senior policy manager at the Information Technology and Innovation Foundation.
"Businesses and creators use it to gain a foothold and find either an audience or more customers," Johnson said. "It will probably have the largest effect on those smaller businesses that have limited to no advertising budget."
Businesses prepare for TikTok ban
Small and large businesses such as Nike, Intel and SAP have taken to TikTok over the years, whether to reach new audiences through organic content or to promote their products through paid advertisements.
For smaller businesses without large marketing budgets, making free content on TikTok has helped them grow, Johnson said.
Losing that reach and losing the audience and customer base they've built through TikTok will be extremely detrimental to them.
Ash JohnsonSenior policy manager, Information Technology and Innovation Foundation
"Losing that reach and losing the audience and customer base they've built through TikTok will be extremely detrimental to them," Johnson said. Jobs and economic opportunities created by TikTok will be a significant loss for the U.S., she added.
Although national security and data collection concerns underpin the U.S. TikTok ban, Johnson said companies have been quiet regarding such issues. Federal and state government leaders, however, banned TikTok downloads from government devices in 2022.
"From a business perspective, I have personally not seen many companies express a concern about security when it comes to TikTok," Johnson said. "I see many very large and well-known brands have TikTok accounts and regularly advertise on TikTok."
Natalie Andrews, manager of social operations for digital advertising agency Adtaxi, said the company is working on an action plan for the U.S. TikTok ban and the many companies that market and advertise on the social media platform. Losing TikTok will have an effect on businesses, she said.
Advertising and marketing on platforms like Meta's Facebook and Instagram differ from the way companies strategize to reach audiences on a platform like TikTok. While companies use Facebook and Instagram to drive customers to websites for purchasing products, businesses use TikTok to improve branding, Andrews said.
"The more you use multiple platforms at once, it supplements your strategies and gets a full funnel effect," Andrews said.
TikTok also offered strong competition to existing dominant social media platforms, such as Facebook, Instagram and Google's YouTube, Johnson said. The TikTok ban will diminish companies' options for reaching younger audiences.
"It was really innovative in several ways. It started the wave of short-form video content, which we now see on a lot of different platforms," Johnson said.
Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining Informa TechTarget, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
