Small businesses and content creators are bracing for the fallout if TikTok goes offline this weekend after the Supreme Court upheld the House ruling on Friday. Laws banning apps Unless sold by a parent company based in China.
Jessica Simon, founder of Mississippi Candle Company, said on Friday that she is “saddened” and expects a significant drop in sales if TikTok is banned from U.S. app stores as early as Sunday. Ta. She said 90% to 98% of the company’s revenue comes directly or indirectly from TikTok.
“A lot of our business comes from people seeing our products on TikTok and purchasing through the TikTok shop or coming to our website,” Simon told CBS MoneyWatch. . “I’m still processing the news.”
Simon, who first started making candles on the stove, said his TikTok shop, which he launched in 2023, “changed our lives.”
Despite such concerns, the country’s highest court declined to block or delay a potential ban if TikTok’s Chinese owner ByteDance fails to sell the platform. The Justice Department, which supported the law, praised the ruling.
“The court’s decision will enable the Department of Justice to prevent the Chinese government from weaponizing TikTok to undermine U.S. national security,” Attorney General Merrick Garland said in a statement. “Authoritarian regimes should not have unfettered access to sensitive data of millions of Americans.”
Jeffrey Fisher, an attorney who represented TikTok content creators in the app’s Supreme Court case, also asked President Biden and Attorney General Merrick Garland in a letter Friday to delay implementation of the law.
“This law is literally scheduled to go into effect on the eve of President-elect Trump’s inauguration, but President Trump recently asked the Supreme Court for similar relief because he wants to address this issue directly,” Fisher wrote. “He should be given that chance. Otherwise, this law would impose a significant burden on the speech rights of more than 170 million Americans and would impose a significant and avoidable burden on third-party providers.” “It would cause disruption and could subject third-party providers to severe penalties if they continue to provide TikTok to millions of users.” ”
TikTok said in a statement late Friday that the White House and Department of Justice failed to provide the clarity and assurances necessary to essential service providers to make TikTok available to more than 170 million Americans. Ta. ”
“Unfortunately, TikTok will be forced to cease service on January 19th unless the Biden administration immediately provides a definitive statement that satisfies our most critical service providers and guarantees that there will be no enforcement action.” ” the company added.
The power of TikTok
and 170 million monthly active usersTikTok is an important source of revenue for millions of small and medium-sized businesses. In Simon’s case, his company’s reach on the platform generated enough sales to build a 2,100-square-foot warehouse and hire a team of employees to help manufacture the company’s products. Mississippi Candle surpassed six figures in sales for the first time in November, and again in December, she told CBS MoneyWatch.
“My heart breaks for the staff,” she said. “You won’t be able to make up for that traffic or sales anywhere else,” she said. Simon’s company has 50,000 followers on TikTok, compared to 7,700 on Facebook and 3,100 on Instagram.
“So we can’t replace that income. We’ll have to completely rebuild our community somewhere else, and that’s going to take much longer than TikTok,” Simon added.
Who wins if TikTok leaves the US?
Morgan Stanley analysts say Facebook and Instagram owner Meta stands to benefit as TikTok users migrate to other platforms, and U.S. consumers spend more on TikTok. They write that about 32 billion hours a year could soon be available.
“Meta remains the biggest underlying winner of the TikTok ban given its already top-tier user base, dataset, and distribution,” analysts said in a research note. Alphabet Inc.’s YouTube could also benefit because it allows users to create short-form videos.
Still, experts say none of these apps comes close to TikTok in terms of their ability to generate revenue for brands, advertisers, and creators.
“Many people are already flocking to other apps, and there will be significant damage and loss of revenue,” Edward Clarice, managing partner at Clarice Law Firm, told CBS MoneyWatch. “We need to find alternative outlets and this ban reduces our presence on already established platforms.”
The parties that stand to lose out if TikTok shuts down its U.S. operations range from independent content creators to corporations and advertisers. For businesses, TikTok allows them to establish accounts that reach users organically, as well as through paid advertising. Popular influencers can also earn a rich living by being paid by brands to promote their products.
“Advertisers are making commercial speeches to get their messages out, influencers are making commercial speeches, and businesses are sharing information. So there’s a lot of money being spent. ” Clarice explained.
He agreed that the ban could be good news for them Competitors like RedNoteanother Chinese-owned app.
Jessica Rauschberg, an assistant professor of communications technology at Seton Hall University, said the impact of TikTok’s shutdown in the U.S. will be far-reaching across a diverse range of users.
“I really worry about everyday creators who have a disability and may not be able to work directly, especially marginalized creators,” she said. “TikTok is a great space for users to supplement their income with content creation, but where do you go if you lose that? You can’t just rebuild it on another platform.”
“This is a great way to reach customers because many young people use it as a search engine and a place to find great local restaurants and artisans who are making special products that you can’t find at Target or Walmart. Because we do,” Lauhaberg added. . “Not only does it hurt consumers, but it’s a huge tool for small businesses to help them. That’s why they’re afraid.”
