The TikTok Saga: What U.S. and Global Businesses Need to Know

The ongoing TikTok saga in the U.S. continues to have implications for both American businesses and global businesses. The social media platform, owned by Chinese tech giant ByteDance, has been involved in legal challenges over national security concerns, primarily centred around data privacy and the potential for the Chinese government to access U.S. user data. 

U.S. President Donald Trump’s executive order, granting TikTok a 75-day extension to comply with a law mandating its sale, has added further uncertainty to the situation. While the order doesn't directly overturn the ban, it essentially postpones enforcement, providing the administration more time to determine its next move. The situation places businesses, particularly small businesses that rely heavily on TikTok for customer engagement, in a precarious position.

The Impact on U.S. Businesses

For the estimated 7 million small businesses in the U.S. that depend on TikTok for marketing, the potential ban has raised concerns about lost sales and disrupted marketing strategies. TikTok is a unique platform, offering businesses an opportunity to reach vast audiences quickly, without the need for traditional advertising budgets. With 50% of TikTok users reporting purchases after viewing content, and the platform generating $1 billion in monthly small business revenue, the stakes are high.

Unlike other platforms, TikTok’s algorithm allows even new accounts to achieve viral success, giving businesses access to millions of potential customers from day one. This rapid, organic growth has led businesses to thrive on the platform, with users spending an average of 58 minutes per day on the app. TikTok’s engagement rate also sets it apart, offering businesses more opportunities to create genuine connections with customers, particularly through unpolished, relatable content. 

The Global Impact: Compliance Risks and Data Privacy

While businesses in the U.S. face the immediate threat of a TikTok ban, companies operating globally need to consider the broader implications of the ongoing TikTok saga, especially in relation to compliance with data protection laws such as the General Data Protection Regulation (GDPR) in the European Union. TikTok’s data privacy issues have sparked concerns about how data is collected, shared, and processed across borders. Global businesses need to ensure they are compliant with regulations like the GDPR, which has strict guidelines on data protection and cross-border data transfers.

The future of TikTok in the U.S. could influence how other governments approach foreign-owned tech companies, potentially leading to more stringent regulations on how user data is handled. Businesses that rely on TikTok for marketing may need to rethink their data practices to avoid compliance risks, especially if the platform faces new legal challenges that could affect global operations. Companies should stay informed on changes in data protection laws and be prepared to make adjustments as necessary.

What’s Next for Businesses?

As the legal battle over TikTok continues, businesses must adopt a flexible approach to their marketing strategies. The best course of action is to maintain an active TikTok presence while preparing for potential disruptions by testing new platforms and diversifying marketing efforts. Businesses should focus on building lasting relationships with their customers by investing in email lists and direct engagement, ensuring they are less reliant on any one platform.

For businesses operating globally, staying up to date on international data protection laws is crucial. As governments worldwide continue to scrutinise social media platforms, the future of TikTok could set important precedents for how companies handle user data across borders. In the face of uncertainty, companies must be proactive, agile, and ready to adapt to whatever comes next in the ongoing TikTok saga. Whether TikTok remains a dominant player in the U.S. market or is replaced by another platform, businesses that prioritise authenticity and customer loyalty will continue to succeed.

How Can Gerrish Legal Help?

Gerrish Legal is a dynamic digital law firm. We pride ourselves on giving high-quality and expert legal advice to our valued clients. We specialise in many aspects of digital law such as GDPR, data privacy, digital and technology law, commercial law, and intellectual property. 

We give companies the support they need to successfully and confidently run their businesses whilst complying with legal regulations without the burdens of keeping up with ever-changing digital requirements. 

We are here to help you, get in contact with us today for more information.