Is a TikTok Ban in the US the Right Move?

TikTok faces further scrutiny as today marked a significant stride in the halls of the United States House of Representatives as they rallied behind a bipartisan effort to push forth a bill targeting the operations of TikTok within the nation’s borders.

With the resounding approval in the House, the spotlight now shifts to the Senate, where the fate of the popular video app will be further deliberated. Should the bill garner enough support in the Senate, it would mandate TikTok’s Chinese proprietor ByteDance to divest its ownership. If the company chooses not to, then the app faces a potential ban on American soil.

The bipartisan bill, dubbed the Protecting Americans from Foreign Adversary Controlled Applications Act, received an overwhelming endorsement in the House, with a vote tally of 352 to 65, as reported by CNN.

Lawmakers argue that the bill isn’t a ban but rather gives TikTok the choice to sever ties with the Chinese Communist Party. They believe TikTok can continue if ByteDance no longer owns it. However, TikTok disagrees, stating on X that the legislation aims for a total ban in the U.S., violating Americans’ right to free expression. They argue it will harm businesses, artists, and creators nationwide.

With further insight, RetailWire’s BrainTrust members provided valuable commentary on this developing story with their initial thoughts on how it may affect the retail industry.

According to Neil Saunders, “TikTok has become an increasingly important funnel for retail, driving people to buy things off the back of advertising, influencer shares, or viral posts. A ban would shut down that activity at a stroke and would leave some retailers scrambling. It would also effectively put an end to the TikTok Shop.” He highlighted that although retailers will eventually divert their efforts and advertising spending to other social platforms, this move would be “painfully disruptive for some in the short term.”

Paula Rosenblum agreed, noting that the ban could potentially take away a valuable way to reach customers. “It’s especially painful for smaller retailers, who use influencers and clever bits to gain visibility for their products,” she explained.

Cathy Hotka noted that “retailers love TikTok as a channel to reach younger consumers.” However, she also understands that “national security is an important consideration. If TikTok is banned in the U.S., another app will take its place.”

Melissa Minkow also speculates that other apps could fill the market void left by TikTok. “If TikTok doesn’t separate from ByteDance after the law ultimately passes (assuming it’s not appealed as an infringement on the First Amendment), other social media platforms will likely ramp up their offerings in facilitation of social commerce,” she said. “Influencers and brands would be back to prioritizing alternatives such as YouTube and Instagram, thus the commercialization efforts surrounding these platforms will take center stage. Retail budgets and priorities will change course as far as where marketing and tech resources are being directed within social commerce.”

Lisa Goller likewise thinks that a TikTok ban would lead to addictive, user-generated content migrating to Meta and YouTube, and she predicts that will impact global retail. “Brands and advertisers would follow consumers and reallocate their budgets from TikTok Shop to Instagram, Facebook, YouTube, and Amazon’s and Walmart’s retail media networks,” she said. “These American platforms would grow as sources of entertaining, shoppable content that connect companies with vibrant digital communities.”

Karen Wong argues that brands might move to other platforms, but it won’t be easy. Her insight regarded the challenges brands targeting TikTok’s key demographics may face, stating, “For those retailers, besides the lost sunk costs, it will be expensive for them to quickly pivot marketing resources to alternative platforms. Personally, I would expect that the majority of the eyeballs/ad spend would move back to Instagram or Snapchat, but a vacuum this big could be a once-in-a-lifetime opportunity for another platform to become the ‘new TikTok.’”

In comparison, DeAnn Campbell believes that brands might not have as many problems swapping over as you’d think — at least, not all of them. Although TikTok has “opened the eyes of retailers to the power of social media to drive sales and brand awareness,” the platform itself is still fairly new. “This means that retailers have not yet shifted their efforts away from other media platforms,” she explained. “Influencers and small business owners who have based their business around TikTok exclusively will find a ban devastating, but for most retailers, it will barely cause a ripple in the water. As for TikTok users, I have confidence they will quickly find another channel to populate, possibly even moving into gaming and VR platforms as their preferred new social media outlet.”

Per Trevor Sumner, “TikTok has been providing helpful competition in social advertising and commerce. An actual ban or shutdown would lessen competition to the benefit of Meta at the cost to retailers and brands in additional advertising costs, as well as the potential of all the lost equity in building their TikTok presences.” He also mentioned that it could stifle innovation, considering that TikTok pushed Instagram further into social shopping. “That said, this is all about posturing,” he added. “TikTok in the U.S. is too valuable to just shut down. There will be a buyer and a transition to the U.S., and then it’s a matter of uncertainty what happens to the service, whether the costs of re-architecture get passed on to advertisers, or whether additional privacy protections will be needed that hurt ROAS.”

Mark Price discussed what will happen to social media influencers, stating that “the potential ban on TikTok will cause retailers to adjust their marketing strategies to other channels, with the highest priority on Instagram. In the short term, sales driven by influencers will significantly drop until the influencers and users shift their behavior to the other channels.”

Continuing with the subject of influencers, Jenn McMillen added that “many people make their living on TikTok, in large part highlighting retailer products and services, for which they receive an affiliate fee. There’s no denying the influence TikTok has on the way that consumers like to shop today. Like Social Selling 2.0! The demise of TikTok will have an effect on retail since so much organic content is pushing business to retailers. Ask the makers of Stanley cups.” She went on to discuss not just the content creators but the viewers themselves. “TikTok is excellent at reaching younger audiences, increasing brand awareness, and pushing viral content,” she explained. “Plus, it plays to consumers’ short attention spans in the form of short videos. Tutorials, previews, product launches, wear tests, unboxing — these seemingly innocuous posts are the retail drivers that will disappear if TikTok does.”

Patricia V. Waldron also emphasized the substantial impact the TikTok ban could have, stating that it “would significantly affect influencers, user-generated content, marketing, and social selling, especially for brands targeting the millennials and younger cohorts.”

However, Richard Hernandez believes retailers will just move on to something better if TikTok gets banned. He mentioned how they see the platform as “a marketing tool for customers, especially Gen Zers who like to hear information in short spurts.” He added, “When a communication method becomes saturated, retailers find that next big thing. It has been Snapchat, Facebook, Pinterest, Instagram, etc. What will it be next?”

According to Jeff Sward, “Congress seems to have lost all capacity to enact nuanced solutions to complicated problems. Yes, I believe them when they say there are potential national security problems. But it’s not like that issue came up three weeks ago.” He emphasized that this topic has been debated for years now, asking, “The best we can do is just ban the whole thing? Ban one of the most popular social and business sites that exists? What about all the data being collected by Alibaba, SHEIN, and Temu? Zero national security issues there?” He went on to say that a ban may be necessary at some point if other solutions don’t pan out, but he wondered, “Where is the conversation about more nuanced, surgical solutions, however drastic they may need to be?”

James Tenser also has reservations about the bill, noting that he has “zero confidence in our politicians’ understanding of the deep cultural impact of complex media technology.” He added, “It sets a worrisome precedent for our government to force the sale of a foreign-owned business it doesn’t like without due process. It singles out one (allegedly) bad actor, rather than defining foundational protective principles that would apply to any content-sharing platform.”

Robert Amster shared his thoughts as well, stating, “What our government wants to prevent is for the data collected to be given to another country to be used against the U.S. There is a big difference between collecting data — every U.S. retailer wants as much data on its customers as they can get — and collecting it to give it to a geopolitical enemy.” He also said there is a difference between “the government intervening to protect the people at large from existential threats to national security and banning newspapers and apps and selected media to keep them from reaching the people for a dictator’s own purpose. The people themselves have to be able to tell the difference and make that decision.”

The bipartisan bill aimed at regulating TikTok marks a significant milestone in the ongoing scrutiny of the popular social media platform. While lawmakers argue for national security concerns and the need for TikTok to sever ties with ByteDance, the platform and its supporters contend that the legislation threatens freedom of speech and will disrupt businesses, particularly retailers and influencers heavily reliant on its reach. The diverse perspectives shared by industry experts underscore the far-reaching implications of a potential TikTok ban, from shifts in marketing strategies to the redistribution of social media influence.