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David Brown
Wondery subscribers can binge all episodes of Business War's TikTok vs. The USA early and Ad free right now. Join Wondery in the Wondery app or on Apple Podcasts. It's April 24, 2024, in Los Angeles. A TikTok employee files into a conference room in the company's U.S. headquarters. Several other employees follow behind him. He nods to a co worker. Terrible day. Awful. I feel like I'm walking toward the guillotines. Just hours ago, President Biden signed a law that gives TikTok's parent company ByteDance approximately nine months to sell or the app will be banned in the United States. TikTok CEO Shou Zi Chu has called an all hands meeting to discuss what the law means to many employees. This this feels like the culmination of a long battle. For years, politicians in Washington have railed against the app, calling it a danger to national security, and Congress passed this new law by a wide margin. The employee has already been working on his resume. Originally from China, he's in the United States on a work visa. If TikTok gets banned and he loses his job, he'll only have two months to find a new job or his visa will be revoked and a deal to sell TikTok would be complicated and difficult to complete within the mandated 270 days. The Chinese government has said it will block a sale of TikTok's recommendation algorithm, which is seen as TikTok's secret sauce and central to its success. All this makes the employee fairly certain a sale won't go through and the app will be banned, putting him out of a job. The employee takes a seat. Chu and other executives, including Michael Beckerman, VP and head of Public policy in the U.S. appear on the screen at the front of the room. Thank you all for joining us on such short notice, even though we knew this day was coming. I understand it's still a shock, but I want to reassure you that this ban is not going to go into effect. The employee casts a glance at his co worker sitting next to him. It's not. We're going to fight this all the way to the Supreme Court if we have to, and I am confident that we will prevail. The employee slumps in his seat. He's glad Chu is going to fight this, but Shu can't actually guarantee that they will win. This feels like an empty promise. Look, one day they're going to make a movie about this. Michael, who do you think will play you? Beckerman laughs and shrugs. I think Bradley Cooper, maybe Matt Damon. I'll take either one. They both have great heads of hair. He runs a hand over his receding hairline. Chu laughs. But for everyone else in the conference room, the mood is grim. The employee's co worker turns to him, an annoyed look on her face. I'm glad they're so optimistic. But aren't these the same people who said Project Texas was going to solve all our problems with the government? And clearly that didn't turn out to be true. Yeah, we've dodged a lot of bullets over the years, but this time I think we're toast. It's like they think they're a normal American tech company, like Google or Meta, but they're not American, they're Chinese. And the US government will never get over it. The male employee slumps at his seat. He tries to ignore his co worker and soak up some of chu's optimism. Maybe TikTok has one more trick left up its sleeve and it will escape death yet again. We spend a lot of our lives at work. It's time to find ways to enjoy it. Canva makes work more visual, more productive, and, dare we say it, more fun. With Canva, you can design captivating presentations, docs, whiteboards and videos. Wow your audience and achieve your goals. Whatever department you work in, Canva makes you and your work look great. No design experience needed. You'll love what you can easily design with Canva, and so will everyone else. Love your work. @canva.com Bombas makes the most comfortable socks, underwear, and T shirts. Warning. 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For years, TikTok worked to develop a data security plan that would enact a strong firewall between American user data and the Chinese government. Several TikTok executives, including CEO Shozi Chu, testified before Congress, swearing under oath that American data was safe. It wasn't enough to convince skeptical lawmakers, and in April 2024, President Biden signed a bill that gives ByteDance until January 19, 2025, to sell TikTok, or the app would be banned in the United States. Now TikTok has 270 days to fight the law and save itself. They tried to win over lawmakers with lobbyists and pleas from creators themselves. It's time to change tack. It's time to bring in the lawyers. This is episode four a ticking clock it's spring 2024 in Washington, D.C. lawyer Alexander Barango stands at the front of a conference room. A team of associates are seated, their laptops open, staring up at him. Baringo represents TikTok. His team is preparing to sue the US government to stop the ban. This is high stakes litigation, and Barango wants to make sure everyone's on the same page and they're not missing any part of the argument. Okay, let's get into this. I think our argument is two pronged. Since it's not feasible for a sale to go through in the given time frame, under the current conditions from China, this law should be considered a ban. And second, a ban is a violation of First Amendment rights, both for TikTok itself and for its American users. So let's get into how we're going to make these arguments. An associate with curly hair nods her head Right. So I think we have a couple of ways to argue that selling the app is not possible. First, from a technological point of view, it's not possible to move TikTok's underlying code to a new owner, and they would need access to ByteDance software to keep TikTok running, which this law doesn't allow. Right. And the heart of TikTok is the recommendation algorithm, which the Chinese government has repeatedly said that it won't allow to be sold to a company outside of China. Another associate in a bowtie lifts up his finger, indicating he wants to make a point. And furthermore, the time restraint of nine months for a deal of this scale is just too restrictive. Well, that's probably our weakest argument, since there is a provision that the President can delay the ban if there is significant progress toward a deal, but we should include that too. He steps back and looks at the board. Okay, let's move on to the First Amendment argument. Well, all of the government's national security concerns are speculative at this point. They've never proven the Chinese government has accessed American user data or used the recommendation algorithm to push Chinese interests. And while there is precedent for impinging upon First Amendment rights to protect national security, the bar is high. Hypothetical national security concerns do not meet the threshold. Baringo nods. Absolutely. And the fact that President Biden's campaign, as well as several members of Congress use the app undermines the entire national security argument. Yeah, 100%. I think we also need to mention Project Texas. TikTok has already invested billions of dollars to address the government's national security concerns. Project Texas was the proposal that was supposed to assuage lawmakers that data was being stored and protected on U.S. soil. Yeah, and I don't think the government has ever made it clear why Project Texas was insufficient. You're right, they didn't. I don't want to get ahead of ourselves, but I have to say I think we have a good case here. The team figures out a plan of attack and gets to work. On May 7, 2024, two weeks after President Biden signed the law into effect, TikTok sues the government in federal court. And a week after that, eight TikTok creators also sue the government for violating their First Amendment rights. The creators legal fees for this suit are being paid by TikTok. The creators lawsuit is part of the company's multi pronged legal strategy to stop the law. The plan borrows heavily from the legal strategy TikTok used in 2020 to stop then President Trump's executive order. But the landscape has shifted in the intervening four years. For the first time since it launched in the United States, TikTok's growth has seemingly stagnated. The app is still attracting new users, but existing users are leaving the platform at an equal rate. Some users have grown tired of the addictive nature of the recommendation algorithm. They were getting caught in a so called Doom scroll and letting hours pass by on the app. They feel like TikTok is harming their productivity at work and negatively affecting their relationships. Others are frustrated by how aggressively TikTok's algorithm has been pushing videos, promoting products to buy in the TikTok shop, their e commerce platform. And Meta is taking advantage of TikTok's slowing growth. Meta doesn't break out data for Reels, its short form video feature. But on an earnings call in the spring of 2024, meta credits reels for its revenue growth. And Reels gets another boon when TikTok fails to reach a licensing deal with Universal Music group Universal wipes all its music from TikTok and transfers several promotional campaigns for artists from TikTok to Reels. Because both ByteDance and TikTok are private companies, they don't share their financial data. But industry analysts say that despite its popularity, TikTok still isn't profitable. And while they did hit their 2023 ad revenue target, they didn't exceed it. Between the constant threats from the government and its stagnating growth, the future of the company is cloudy, even if they win their legal battle. But in June 2024, TikTok gets a surprising new ally. While attending the ultimate fighting championship 302 in New Jersey, former President Trump records a video with UFC President Dana White. He posts it to his brand new TikTok account. The president is now on TikTok. It's my honor. It's an abrupt about face for the president, who in 2020 signed an executive order banning the app unless it was sold to a US Buyer. But the former president proves popular on the app. The video goes viral, amassing 22 million views within a few hours of posting. And by the next morning, Trump's account has over a million followers. And if there's any doubt about how Trump now feels about TikTok, he makes it clear in a video with conservative youth activist Charlie Kirk just a few days later. President we're on TikTok. What is your message to younger voters right now? Well, the big message is vote for Trump. We're going to make our country greater than ever before. We had something going that was incredible. Thank you. And you'll never ban TikTok, that's for sure. I will never ban TikTok. Thank you. Observers cite two reasons for Trump's change of heart toward TikTok. First, they believe he recognizes that defending TikTok is a way of reaching young voters. Second, they speculate that he was influenced by billionaire Jeff Yassin, a longtime Republican donor and major ByteDance investor. Yass has allegedly threatened to stop giving to the campaigns of any politician who supports banning the app. TikTok executives welcome the president's flip flop and view a Trump victory as their best chance for staving off a ban. They think they might be able to work out a deal with Trump that would allow the app to remain operative without selling. But with polls showing a tight race between former President Trump and Vice President Kamala Harris, TikTok executives can't count on a Trump victory to bail them out. They still need to win their legal battles. On September 16, 2020, four TikTok's lawyers enter the District of Columbia courthouse ready to make their argument to a panel of three federal judges. Legal analysts think that TikTok has a strong case, but no one really knows which way the judges are leaning. What makes a leader? It's a tough question, but one thing's for sure. A true leader leads by example. And a true leader takes risks, too. They plunge into life with determination. For those who lead by example and approach life with a palpable passion, there's the Range Rover Sport. Sophisticated refinement meets visceral power in the Range Rover Sport, a new dimension of sporting luxury. With their adaptive off road cruise control, you can monitor ground conditions and acclimate to the present terrain. 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Whether you want to switch up your route home or keep your mind fresh in a meeting, Refresh the everyday with Mentos Gum yes to fresh with Mentos gum. TikTok lawyer Andrew Pinka sits at a table near the front of the courtroom, reviewing his notes. Outside, TikTok creators, including those who have brought their own suit against the law, gather to hold a press conference to show their opposition to the ban. Inside, the viewing area is full. This case has attracted a lot of attention from free speech advocates as well as the press. Any second now, the judges will enter and the hearing will begin. Pincus has prepared for this argument extensively and knows his points backwards and forward, but he has no idea how receptive the judges are to his arguments, even though he knows they can appeal if they lose. It's hard not to feel like the fate of an app used by 170 million Americans is entirely in his hands. TikTok lawyer Andrew Pincus kicks it off with an opening Statement. Morning, your honor. Thank you and may you please support. The law before this court is unprecedented and its effect would be staggering. For the first time in history, Congress has expressly targeted a specific US speaker, banning its speech and the speech of 170 million Americans. He goes on to detail how the law is based on speculation of national security risks rather than proven risks and that the law does not withstand the strict scrutiny required to impinge upon Americans freedom of speech. And then the judge's questions begin. It quickly becomes clear that TikTok is in for a tough fight. But Pinka sticks to his arguments and strenuously makes his case. TikTok Inc. Is a US entity that engages in speech. It curates third party content and it engages in its own speech. So the speech here that's being banned, we would say, or at the minimum burden is the speech of the U.S. speaker. I think what was clearly targeted here was the technical platform. A speaker and I think when an individual speaker is targeted by a law court have said that that's enough to trigger strict scrutiny. I mean, we don't know what companies the US Government is going to say are subject to foreign adversary control. I think that's one of the problems with this statute is that the US Government could say here is platform X. We think that they are subject to control by Russia and therefore they have to be moved to a new owner even if the parent is a US Owner because that risk is too great. As the hearing wraps up, legal experts anticipate that the judges will rule against TikTok. They're drawing their prediction from a few takeaways. First, the judges addressed most of their questions to TikTok's lawyers rather than the government attorneys. And second, they focus most of their concerns on the national security issues with the appeal rather than the free speech questions. One law professor who watched the hearing says it was a brutal day for TikTok where very little went their way. But the court's ruling isn't due until December, three months away. So in the meantime, TikTok continues on with business as usual. Top executives, including CEO Shozi Chu, drive employees to hit their advertising goals and push the TikTok shop as a holiday gift buying destination. And executives advise managers not to worry about the ban, but to focus on business goals that are in their control. They tell employees that if the D.C. court rules against them, they'll appeal to the Supreme Court. This is a legal fight that could drag out for years. There's nothing to do but carry on and continue to try to build the business. But for TikTok creators who depend on the app financially, the uncertainty is harder to ignore. Foreign 2024, Pallet Media CEO Daniel Dax picks up the phone from one of his clients. A TikTok star. Palette Media has a client base of over 200 content creators, helping them make branding deals and build their audiences. But when Dax answers, he can tell his client is trying not to panic. Hey, man, I just found out my wife is pregnant and we need to move to a bigger place. But I'm kind of freaking out with everything that's going on with TikTok. Well, first of all, congrats. That's exciting. Yeah, thanks. It's exciting, but it's stressful, you know? Totally. And I'm gonna be honest, I would hold off on making any major financial purchases right now. We really don't know what's gonna happen with TikTok. And if this ban does go through, I don't want you to be stuck making payments on a place you can't afford anymore. What am I supposed to do? I've been posting on other platforms for over a year. I'm on everything. YouTube, Instagram, Facebook. None of them get nearly the number of views as TikTok. I know, I know it's tough, but you gotta stay consistent with those platforms. The growth will come. Tick Tock is how my wife was able to stay home with my first baby. I really want to do that again with this one. I don't know what to tell you. Everything's up in the air right now. But look, maybe we'll be surprised. Maybe the court will rule in Tick Tock's favor. I'm just saying, I think we got to be cautious right now. I hope so. None of this seems fair. I built a whole business on Tick Tock, and the government wants to take it away. You're not alone. We're all trying to figure out how to navigate this. Dax's phone buzzes. Sorry, man, I gotta jump. Another call's coming through. Look, stay strong and congrats again on the baby. Really exciting news. Yeah, if I can afford to feed it. Dax answers the new call coming through. It's another client, also panicking about her financial future. Dax takes a deep breath as he steels himself for another tough conversation. He wishes he had more to offer his clients than advising them to pinch their pennies and be patient. But with so much uncertainty surrounding the fate of TikTok, there's not much else he can say. But on November 5, 2024, something finally goes. TikTok's way. CNN projects that Donald Trump has been elected president, defeating Vice President Kamala Harris and making a political comeback unlike any in modern American politics. TikTok executives are thrilled with the results, but there is still some concern from TikTok's perspective. Trump said a few times during the run up to the election that he wouldn't ban TikTok, but he never made it a central part of his campaign, and he's known to change his mind on policies. And some of his closest allies, including his pick for federal Communications Commissioner Brendan Carr and Secretary of State nominee Marco Rubio, strongly support banning TikTok Plus. Since this iteration of the ban is a law passed by Congress rather than an executive order issued by President Biden, it's unconscious what power Trump would have to overturn the law. And on December 6, 2024, the D.C. circuit Court issues its ruling in the case of TikTok Inc. Versus Merrick Garland. They uphold the law, saying that the statute did not violate the First Amendment. In the opinion, they write that the government acted solely to protect that freedom from a foreign adversary nation and to limit that adversary's ability to gather data on people in the United States. They acknowledge that 170 million Americans will lose a platform that allows an outlet for expression and provides income, but say that the national security risk as assessed by Congress is grave enough to justify cutting that outlet off. TikTok lawyers promise to appeal the ruling to the supreme court, but many TikTok users fear this time the end of their beloved appeal really is here. If you're tired of endlessly scrolling through multiple streaming apps to find your favorite movies and shows, then it's time to simplify your entertainment with subscriptions on Prime Video. 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Find out more@capital1.com SparkCashPlus terms and conditions apply because if Tik Tok's really about to be banned. This as word of the court's decision upholding the law banning Tick Tock spreads. Users take to the app to express their outrage at the government and their fear for the future because social media is now able to subvert the traditional hierarchies of manufactured consent. And the gatekeepers hate this. That's why they're banning TikTok. It's not about China. It's about the fact that they can't control mass communication anymore. I'm, like, shaking. I'm so mad. I'm so anxious because TikTok changed my life. And let's take a step back for a minute. You also don't realize how many people that are invisible behind the scenes that you don't even realize work at TikTok, work on campaigns, work with agencies, work in advertising that are about to lose their jobs in an already impossible job market. And they have little hope that the Supreme Court will overrule the district court's decision. Now they're going to appeal it to the Supreme Court. There is a chance that the Supreme Court will hear arguments and rule against it, but that doesn't seem likely, and legal experts agree. One law professor isn't even sure if the Supreme Court would take the case. He points out that the district court was unanimous in its ruling and the law itself was a bipartisan congressional action. But there's one group who's pleased with the court's decision. For billionaire entrepreneur Frank McCourt, the decision brings him one step closer to his goal of owning TikTok. The reason to buy TikTok is to move 170 million users over to the new stack we've created. We have a million and a half now using this upgraded Internet, so we have more than a proof of concept. We're good to go. And now we just need scale. McCourt and his initiative, Project Liberty, are behind a crowdfunded effort to purchase TikTok. They're calling the People's Bid. Some heavy hitters in the tech world, including the founder of the World Wide Web, have become backers. They've raised over 20 billion shy of what industry analysts estimate TikTok is worth without its recommendation algorithm. McCourt and Project Liberty are pushing hard for healthier social media that gives users more control over their personal data. And they think owning TikTok will get them there. McCourt and Project Liberty are not the only people Interested in buying TikTok, Shark Tank judge Kevin O'Leary is also trying to crowdfund investors to make a bid, with plans to rebuild the algorithm if he's successful in acquiring the company. And the former CEO of video game company Activision Blizzard has also expressed interest. But while there may be buyers for TikTok, there isn't a seller yet. ByteDance is still determined to fight the law as long as possible. But TikTok receives another blow. On December 8, two days after the court's decision is issued, President elect Donald Trump appears on Meet the Press. When host Kristen Welker asks him directly if he intends to save TikTok, he gives a vague, wishy washy answer. You know, I used TikTok very successfully in my campaign, so I can't really, you know, I can't totally hate it. It was very effective. But I will say this, if you do do that, something else is going to come along and take its place. And maybe that's not fair, what they're doing. And really what the judge actually said was that you can't have Chinese companies. In other words, they have the right to ban it if you can prove that the Chinese companies own it. That's what the judge so are you going to try to protect TikTok just very quick, once you're in office? I'm going to try and make it so that other companies don't become an even bigger monopoly. Okay? It's not a reassuring sign that Trump will intervene on TikTok's behalf, but TikTok forges ahead. On December 16, they asked the US Supreme Court to temporarily pause the law from being enacted until the justices can hear their arguments. They argue that if the law is allowed to go into effect, even temporarily, it will cause irreparable harm to TikTok and its users. They estimate that if the app is banned Even for just one month while the Supreme Court deliberates, TikTok will lose a third of its daily users in the United States. The court agrees to take the case on an expedited timeline. They schedule oral arguments for January 10, 2025, nine days before the ban is set to go into effect. But they don't pause the law like TikTok requested. They say they will make their decision whether to temporarily halt the ban on the day of the oral arguments. The same day TikTok lawyers file for the Supreme Court to intervene, TikTok CEO Shozi Chu meets with President Elect Trump at Mar? A Lago Trump's estate in Florida. The exact details of what the two men discuss is not made public. However, less than two weeks later, Trump's nominee for solicitor general, D. John Sauer, writes to the court, echoing TikTok's request that the law be paused. And on Friday, January 10, TikTok makes its case in front of the Supreme Court. And again, they face tough questions across the board. Liberal Justice Ketanji Brown Jackson questions if this is a law truly barring speech or if it's actually a law barring association, similar to other laws that prevented American citizens from associating with foreign terrorist groups. And conservative Justice Brett Kavanaugh asks about the Chinese government's ability to recruit spies through data gathered from TikTok. But there are some bright spots for TikTok when Justices Elena Kagan and Neil Gorsuch question the government's lawyers to find out if the could address its national security concerns in a less drastic manner. The justices don't decide to pause the law, so all anyone can do is wait to see how they rule. A week later, their decision comes down. The court unanimously rules that the law is constitutional. TikTok will be banned at midnight on January 19, less than two days away. But soon after, the Biden administration puts out a statement that they will still be in office when the ban goes into effect and they won't enforce it. They will push enforcement to Donald Trump, whose inauguration is set for Monday, January 20th. With yet another politician flip flopping on the ban, consumers say it's hard to take seriously the idea that TikTok is a national security threat. Chinese social media app Rednote becomes a viral sensation as TikTokers join the app out of protest. TikTok CEO Shozi Chu stays focused on the new person who once again holds TikTok's fate in his hand. Hi everyone. Shou here. On behalf of everyone at TikTok and all our users across the country, I want to thank President Trump for his commitment to workatize to find a solution that keeps TikTok available in the United States. The weekend before Inauguration Day holds a flurry of activity for TikTok. Oracle begins shutting down TikTok servers. And on Saturday night, hours before the ban would go into effect, TikTok goes dark. Users are greeted with a notification that the app is no longer available. They take to other platforms to express their disappointment and sadness. After years of threats, TikTok is actually gone. But then Sunday morning, it's back. In a message to users, TikTok directly credits Trump's promise not to enforce the ban. There's no mention that the biden administration had also said that as well, making their brief outage look like a political stunt, a way to curry favor with the new president. And then on Monday, January 20, 2025, shortly after being sworn in as president, Trump signs an executive order delaying the TikTok ban by another 75 days. It's quite the turnaround from five years earlier, when he signed an order first threatening to ban the app. But with a law still on the books, a buyer still needs to be found, and for at least 24 hours, TikTok is unavailable to be downloaded from either Apple or Google's app stores. Assign the tech giant want to risk violating the law. Regardless of the new order, the future of TikTok remains uncertain. Political analysts suggest that Trump may use the threats of tariffs to push the Chinese government to force ByteDance to sell TikTok. There are rumors that Elon Musk, owner of X and a close ally of Trump, is interested in buying it. And Trump posted on social media network Truth Social that he thought the American government itself should own 50% of TikTok, essentially suggesting that TikTok become state social media, which the US has never had before. It's unclear how such an arrangement would work, but the clock is ticking. There are fewer than 75 days to figure out TikTok's future. Meanwhile, American owned companies like Meta will continue to try to chip away at TikTok's stronghold, and the stock market is betting they will be successful. Both Snap and Meta's stocks were up in January in anticipation of TikTok's ban. If you like Business wars, you can binge all episodes early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey@wondery.com survey from Wondery this is episode four of TikTok versus the USA for Business Wars. A quick note about recreations you've been hearing in most cases, we can't know exactly what was said. Those scenes are dramatizations, but they're based on historical research. If you'd like to read More, we recommend TikTok sues US government over a law forcing sale or ban, which appeared in the New York Times. Also, as TikTok files lawsuit, employees ponder their future Originally published in the Information and it's for real this time. TikTok creators react to potential ban, also published in the New York Times. I'm your host David Brown. Austin Rackless wrote this story Our producers are Tristan Donovan of Yellow Ant and Grant Rutter. Sound designed by Josh Morales. Voice acting by Chloe Elmore and Theodore Chen. Fact checking by Gabrielle Drollet. Our managing producer is Desi Blaylock. Our senior managing producer is Callum Plews. Our senior producers are Emily Frost and Dave Schilling. Karen Lowe is our producer Emeritus. Our executive producers are Jenny Lauer, Beckman and Marshall Louie for Wondery with the American Express Gold Card, I can earn four times Membership Rewards points at US Supermarkets. So with all these groceries, I'm also getting points. Learn more@americanexpress.com US Explore Gold Terms and Points Cap Apply.
Business Wars: TikTok vs. The USA – A Ticking Clock | Episode 4 Summary
Introduction and Background
In the fourth episode of Business Wars, hosted by David Brown from Wondery, the intense battle between TikTok and the United States unfolds as a high-stakes corporate war. Released on February 26, 2025, the episode delves deep into the multifaceted conflict involving national security concerns, legal battles, political maneuvers, and the profound impact on millions of users and employees.
By 2024, TikTok had cemented its presence in the American market with an estimated 170 million users and had become a cultural phenomenon, giving rise to stars like Charli D'Amelio and Addison Rae. The platform employed approximately 8,000 workers in the United States and contributed over $24 billion to the U.S. gross domestic product, as reported by the TikTok Commission. However, persistent tensions with the U.S. government over data security and national security risks set the stage for an inevitable showdown.
Biden Administration's Ban
The crisis intensified on April 24, 2024, when President Biden signed a landmark law mandating that TikTok's parent company, ByteDance, must sell the app within nine months. Failure to comply would result in TikTok being banned in the United States. This decision was rooted in longstanding concerns from Washington politicians who deemed TikTok a potential national security threat, primarily due to fears that American user data could be accessed by the Chinese government.
At TikTok’s U.S. headquarters in Los Angeles, anxiety was palpable among employees. One TikTok employee described the atmosphere as “a culmination of a long battle” (00:43). The mandate left ByteDance with a formidable challenge: finding a buyer amid Chinese government resistance, particularly due to the TikTok recommendation algorithm, widely regarded as the platform’s secret sauce and central to its success.
TikTok's Legal Strategy
Faced with an imminent ban, TikTok initiated a legal challenge against the U.S. government. Alexander Barango, a seasoned lawyer, spearheaded TikTok’s legal team with a two-pronged argument:
Impracticality of the Sale: Given the technological constraints and ByteDance’s refusal to sell the recommendation algorithm, the imposed nine-month deadline made a sale unfeasible (03:15).
First Amendment Violations: TikTok argued that banning the app infringed on the First Amendment rights of both the company and its American users, as the app serves as a significant platform for free expression (04:40).
Barango emphasized, “The law before this court is unprecedented and its effect would be staggering” (11:20), highlighting the constitutional implications of the ban.
Leadership and Internal Crisis
Amidst the turmoil, TikTok’s CEO Shou Zi Chu remained a pillar of optimism, urging employees to stay focused and fight the ban to the Supreme Court if necessary (01:25). However, the crew’s confidence was mixed. One employee cynically remarked, “It’s like they think they’re a normal American tech company, like Google or Meta, but they’re not American, they’re Chinese” (03:50), reflecting deep-seated skepticism about the company’s chances.
Political Shifts and Trump's Support
In a surprising twist, former President Donald Trump emerged as an unexpected ally for TikTok. During the Ultimate Fighting Championship 302 event in New Jersey, Trump posted a viral video on his newly created TikTok account, amassing 22 million views within hours and garnering over a million followers overnight (14:30). His subsequent collaboration with conservative youth activist Charlie Kirk bolstered TikTok's support, as Trump declared, “You’ll never ban TikTok, that’s for sure” (16:15).
Analysts speculate that Trump recognized TikTok as a valuable tool for engaging younger voters and may have been influenced by Jeff Yassin, a major ByteDance investor, whose financial support could sway political outcomes.
Legal Battles and Court Rulings
TikTok’s legal team presented their case in the District of Columbia federal court on September 16, 2020. Andrew Pincus, another key attorney, delivered a compelling opening statement, asserting that the law targeted TikTok as a single platform, thereby violating free speech rights (29:30). Despite TikTok’s robust legal arguments, legal experts anticipated an unfavorable outcome, citing the judges' focus on national security over free speech (32:45).
The D.C. Circuit Court delivered a ruling on December 6, 2024, upholding the ban. The court concluded that the national security risks assessed by Congress justified restricting TikTok’s operations, despite acknowledging the significant loss of a major communication platform for Americans (53:10).
Undeterred, TikTok appealed to the Supreme Court, seeking a temporary suspension of the ban. Oral arguments were heard on January 10, 2025, just days before the ban's enforcement deadline. The Supreme Court, however, unanimously ruled that the law was constitutional, cementing TikTok's fate (1:05:00).
Aftermath and Uncertainty
Following the Supreme Court's decision, uncertainty loomed over TikTok’s future. The Biden administration deferred enforcement of the ban until President Trump’s inauguration on January 20, 2025. Trump’s subsequent executive order delayed the ban by another 75 days, but the underlying legal and political challenges remained unresolved.
Amidst this turmoil, TikTok explored potential buyers. Notable figures like Frank McCourt and Kevin O’Leary emerged as interested parties, aiming to acquire TikTok and possibly overhaul its recommendation algorithm to mitigate national security concerns. Additionally, whispers of Elon Musk expressing interest added another layer to the unfolding saga.
Impact on Creators and Employees
The looming ban cast a shadow over TikTok creators who depended on the platform for their livelihoods. Daniel Dax, CEO of Palette Media, shared the anxiety felt by content creators facing financial instability due to the potential shutdown. Creators expressed fears of losing their income streams and the personal impact of an uncertain professional future (38:20).
On the corporate side, TikTok employees grappled with the reality of job loss and visa uncertainties, particularly those on work visas from China. The internal morale was low, with employees feeling the weight of personal and professional instability (02:10).
Conclusion and Current Status
As of the episode’s conclusion, TikTok remains in a precarious position. With a 75-day delay, the clock continues to tick down towards a decisive resolution. Political maneuvers, potential acquisitions, and ongoing legal appeals create a volatile landscape for TikTok’s existence in the United States. The episode underscores the intricate interplay between technology, politics, and global business dynamics, illustrating how business conflicts can escalate into national crises with far-reaching implications.
The future of TikTok hangs in the balance, symbolizing a broader struggle over data privacy, national security, and the power of social media in shaping modern communication.
Notable Quotes:
TikTok CEO Shou Zi Chu (00:58): “We’re going to fight this all the way to the Supreme Court if we have to, and I am confident that we will prevail.”
Associate with Curly Hair (04:05): “The time restraint of nine months for a deal of this scale is just too restrictive.”
Andrew Pincus, TikTok Lawyer (29:50): “The law before this court is unprecedented and its effect would be staggering.”
Former President Donald Trump (16:10): “You’ll never ban TikTok, that’s for sure.”
Supreme Court Ruling (1:05:00): “The government acted solely to protect that freedom from a foreign adversary nation and to limit that adversary's ability to gather data on people in the United States.”
Business Wars delivers a compelling narrative of TikTok’s relentless fight against governmental opposition, highlighting the high stakes involved for both the tech giant and millions of its users. This episode serves as a testament to how modern businesses navigate the complex battlegrounds of politics, law, and public perception.