The idea of banning a social media platform like TikTok appears objectionable to many people on the grounds that it infringes on free speech. Elon Musk, the owner of competing platform X, for instance, was “against a TikTok ban for a long time, because it goes against freedom of speech”. If you prefer the language of TikTok’s lawyer, Andrew Pincus, “This law [banning TikTok in the U.S.] imposes extraordinary free speech prohibitions based on indeterminate future risks”.
Interestingly, one of the strongest arguments in favour of the ban is also based on free speech protection. At the end of 2022, journalist Randall Lane of Forbes accused ByteDance – TikTok’s parent company – of “a direct assault on the idea of a free press and its critical role in a functioning democracy”. This was more than just an accusation. ByteDance actually admitted that its employees had improperly accessed the user information, including IP addresses, of two journalists. The employees’ aim, apparently, was to figure out whether the journalists were physically located with certain TikTok employees supposed to be feeding them confidential information. Not that this justifies what they did, which the Financial Times calls “completely unacceptable”.
These disturbing events raise a big question mark over the righteous indignation expressed by people like Andrew Pincus. There was now proof that American lawmakers’ concerns about the potential use of the platform to illicitly obtain personal data were more than just paranoia. The specific worry of US Justice Department attorney Daniel Tenny was that the Chinese Communist Party might utilize the data to recruit American spies. Indeed, Chinese corporations like ByteDance are obligated by law to share information with official intelligence gatherers. Aside from this, there is the concern that ByteDance might manipulate the app’s algorithm to influence their users’ viewpoints on various important issues.
Whatever our personal feelings are on the subject, the US Congress voted overwhelmingly in favour of a ban in April last year, with 360 members taking the cake from 58 naysayers. When the issue came before the Senate, the vote came in 80-19 in favour of the prohibition. As a result of all this, an official ban on TikTok took effect on January 19th, 2025, forbidding U.S. internet service providers and app stores from making it available.
Bloomberg news, in January 2025, reported there was a possibility of Elon Musk purchasing the social media platform and taking it over. Was there any basis for the claim? If Musk really wasn’t interested in making the purchase, what’s the reason for this? Join us for some answers.
During President Trump’s first term in office, he supported the idea of a TikTok ban. After his second election victory, however, he seemed to have a change of heart, partially because “I think I won it through TikTok, so I have a warm spot in my heart for TikTok”. Still, Trump was unable to stop the new law from taking effect because the deadline to do so expired a day before his new term began. In fact, on January 19th, he agreed there was a need to apply the ban for reasons of national security, but suggested that half the company ownership should be transferred to American entities.
On the first day of the president’s second term, he signed an executive order to delay the forced sale of TikTok to allow more time for a suitable deal to be arranged. Thus, after a three-week stoppage, the app could again be downloaded to Android phones. Trump’s delay has a limit of 90 days, however, after which time his power to put off the law will be curtailed. Indeed, U.S. senators like Kevin Cramer have asked if the delay itself is legally acceptable since both Democrats and Republicans gave it the go-ahead, as did the Supreme Court.
On January 22nd, Trump said he would be amenable to a takeover TikTok buy on the part of Musk, should that man be interested in taking on the project. When the X boss and Tesla CEO was questioned on the issue in January at a conference in Germany, he made it clear that he had no intention of buying TikTok. He went on to explain that his purchase of Twitter – later to be renamed X – was not indicative of a desire to acquire multiple social media platforms. He had made this specific move because he felt it needed to be done to “preserve free speech”. As we mentioned, this was the same reason he opposed the ban on TikTok. Still, Musk has pointed out that “the current situation where TikTok is allowed to operate in America, but X is not allowed to operate in China is unbalanced”.
Trump has said he’s “going to make it worthwhile” for China to agree to a transfer in company ownership. Not only that: He would view it as an act of “hostility” if the Chinese government stood in the way of a sale. As far as the Chinese government is concerned, the prospect of selling half of TikTok to an American buyer is not exactly enticing. Indeed, they have stated their intention to block the sale of the app’s algorithm, which manages the content recommendations sent to users. If China stands by its approach, this would imply a new owner would have to develop an original algorithm for the app, which, according to ByteDance lawyers, is “not remotely feasible” due to the “millions of lines of software code that have been painstakingly developed by thousands of engineers over multiple years”.
Glenn Gerstell of the National Security Agency also thinks the sale is a bad idea. “There’s no way to take the U.S. piece out of TikTok and sell it to someone”, he says. In his view, the integral connections between TikTok and ByteDance cannot be loosened, relegating Trump’s proposed sale to the realm of the impractical. In the event the deal is indeed ruled out, what would happen to the TikTok user data already in the hands of ByteDance?
To this question, Forbes answers bluntly that “All of American’s TikTok user data could be moved to China”, pointing to the case of India’s shutdown of the app back in 2020, which left ByteDance with access to the private information of millions of ex-app-users. In March of 2023, Forbes reported that TikTok retained access – three years after the Indian ban took hold – to “troves of personal data of Indian citizens”. Forbes even quoted a TikTok employee as saying: "I don't think Indians are aware of how much of their data is exposed to China right now, even with the ban in place".
India made the move to ban for a similar reason to US lawmakers, namely, in order to safeguard national security. Their ban came on the heels of violent conflicts between Chinese and Indian military personnel in the disputed border area between the two countries. The Indian government responded by banning more than 50 Chinese apps, including TikTok, which had been popular among Indians since 2017. TikTok had bolstered the infrastructure that allowed for content streaming to rural areas in the country, expanding their user base significantly. Indian users could even form digital communities based on regional dialect similarities.
Beyond the social and political debate, the TikTok ban and its uncertain ownership situation have significant implications for the stock market and online investments. Investors are closely watching how this development will impact tech stocks, digital advertising revenues, ETF funds, and broader market sentiment.
With these factors in mind, let’s explore how Elon Musk’s decision and TikTok’s uncertain future could shape the stock market, online trading, and long-term investments.
Professor William Akoto of the School of International Service believes that “banning a single app does not solve the broader issue of data security and foreign influence”. Akoto points out that American social media platforms like Facebook and Instagram have also been accused of misusing the personal data of their clients. In his view, what’s really needed is a broader shift towards “stronger regulations on data collection, stricter rules on third-party data sales, and clearer guidelines on how tech companies handle sensitive information”. This project would have to be done in a way that doesn’t exacerbate trade tensions between China and the U.S. China has already responded to American bans on computer chip exports to their nation with parallel blockages on the sale of earth minerals – needed for technology applications – to the United States.
Even though the Indian ban deprived TikTok of its largest foreign market, numbering about 200 million people, the company still flourished in the years that followed.
In fact, their user base doubled in the years between 2020 and 2024 due to incoming clients from countries like Brazil, Vietnam, and Indonesia. Indeed, knowing this may inspire ByteDance with the confidence to hold out on any potential sale in 2025.
There are several potential buyers, including Microsoft, lined up should ByteDance finally agree to sell. In the absence of any concrete deal, however, U.S. law will take effect, and the ban will be permanently established.
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