Explainer-What will happen to TikTok when it goes dark? By Reuters

By Sheila Dang and Jaspreet Singh

(Reuters) – TikTok stopped working for 170 million Americans late on Saturday after the U.S. Supreme Court on Friday ruled against TikTok’s bid to avoid a ban that could have shut down the app.

The ban is the end result of 2024 national security legislation that calls on TikTok parent ByteDance to sell the popular short video app or see it shut down in the United States on January 19.

It remained unclear how long the ban would remain in place, as President Donald Trump, who took office on Monday, said he would seek a “political solution” to allow the app to operate in the US.

On Sunday, Trump said on Truth Social.

This is what is happening now.

WHAT WILL HAPPEN TO THE APP?

New users will not be able to download TikTok from the Apple (NASDAQ:) and Google (NASDAQ:) app stores, and existing users will not be able to update the app because the law prohibits any organization from facilitating the download or maintenance of the TikTok application .

It was not immediately clear whether TikTok’s business partners, including Oracle (NYSE: ), which provides TikTok’s cloud infrastructure services and stores its US users’ data, have suspended services.

TikTok plans to continue paying its 7,000 employees in the US, the company’s management said in an internal statement.

HOW WILL USERS BE AFFECTED?

TikTok’s 170 million US users can’t access the app, even if they haven’t deleted it from their phones.

As of Sunday, US users hoping to access TikTok through virtual private networks, or VPNs, which can hide a user’s Internet Protocol or IP address, address, and thus their location, were unsuccessful.

Other Chinese social media apps, such as RedNote, known in China as Xiaohongshu, are expected to continue to gain traction among US users.

Content creators who have built businesses from their TikTok followers have urged their followers to find them on alternatives like Instagram and YouTube.

WHAT WILL ADVERTISERS DO?

Advertisers rushed to prepare contingency plans ahead of the ban, fearing the shutdown would jeopardize their campaigns on the platforms.One marketing executive described it as a “hair-on-fire” moment for the advertising world, after months of conventional wisdom saying the solution would be a short-form video app. to continue and run.

TikTok has continued to offer new features to advertisers, such as a beta tool that will make it easier to create, edit, and add more ads.

According to a forecast by the marketing group WARC Media, the ban allows more than $11 billion in annual advertising investment.

“Wall Street will be watching the results of Meta ( NASDAQ: ), Snap and others to see who benefits from this rapid shift in spending,” said Craig Atkinson, CEO of digital marketing agency Code3.

WHAT WILL HAPPEN TO US-CHINA TRADE RELATIONS?

The ban on TikTok could worsen trade tensions between the US and China, which had already escalated after Beijing imposed restrictions on exports of advanced American semiconductor technology.

However, “such a ban would not come as a surprise as it has been under discussion for five years,” said Sean Ennis, a professor at the University of East Anglia (NYSE: ).

Trump may try to use executive action to protect TikTok during his four years in office, but he could use the risk of a reversal to extract something meaningful from China, analysts at LightShed Partners said.

Lifting the ban could give Trump some bargaining power with China, analysts say.

WHO ARE THE POTENTIAL BUYERS?

TikTok has repeatedly said it can’t sell to ByteDance.

That hasn’t stopped billionaire businessman Frank McCourt, the former owner of the Los Angeles Dodgers baseball team, from valuing the app without its algorithm at about $20 billion.

Other media outlets have reported that Chinese officials are in talks to potentially sell TikTok’s US operations to billionaire Elon Musk, a major financial backer of Trump.

TikTok called those programs “artistic”.

Hours before the ban took effect on Saturday, US search engine startup Perplexity AI submitted a bid to join TikTok’s US operations, according to a source familiar with the matter.