Caixin Weekly | Special Report: TikTok Faces New Challenges (AI Translation)

财新周刊｜特别报道：TikTok再渡劫

[para. 1][para. 2][para. 3] TikTok has faced ongoing challenges in the U.S., with operational uncertainties prompting shifts in its strategic approach. After a brief shutdown, TikTok resumed operations in the U.S. following an executive order by President Trump granting a 75-day grace period. Despite attempts to appease the U.S. government by considering several acquisition offers, including those from high-profile companies such as Oracle and Walmart, TikTok, owned by ByteDance, has resisted changing its ownership structure.

[para. 4][para. 5] The conflict dates back to 2020, with former President Trump citing national security concerns as a reason for TikTok's divestment. Although TikTok avoided an immediate ban through legal interventions, the broader geopolitical context, including bipartisan legislative support, has maintained pressure on TikTok’s U.S. operations.

[para. 6][para. 7] TikTok's significance as a social media platform is evident in its role in elections, with Trump having utilized it to engage with young voters, contributing to its popularity. As of 2024, ByteDance, TikTok's parent company, sought to address national security concerns through dialogue rather than an outright sale, the common target being satisfying the demands of the U.S. government without alienating its users or stakeholders.

[para. 8][para. 9][para. 10] The evolving political landscape has seen shifts in regulatory focus towards apps like TikTok, sparking reactions from both China and U.S.-based stakeholders. There are ongoing discussions about TikTok’s future structure, considering the "sell or be banned" legislative backdrop, while Chinese authorities have retained significant control over technology exports, complicating potential divestments.

[para. 11][para. 12][para. 13] On the operational front, TikTok is pressured to align its international operations with U.S. laws while grappling with its reliance on proprietary technology. With TikTok’s vast U.S. user base and significant advertising revenue, the potential for geo-strategic shifts in operations, such as joint venture configurations, presents complex challenges involving multiple stakeholders.

[para. 14][para. 15] While ByteDance aims to withstand these challenges without a sale, current U.S. legislation, requiring full or partial divestment, poses potential risks to TikTok's market presence. The supposed joint venture solution, which maintains operational continuity but requires compliance with stringent legal and political conditions, is being explored, despite previous disruptive attempts.

[para. 16][para. 17][para. 18] Furthermore, competitor platforms have made significant gains as uncertainties surrounding TikTok persist. TikTok’s user demographics and engagement levels have prompted it to consider alternative paths, including diversifying its market approach and strengthening its position through non-U.S. based applications, potentially impacting market dynamics significantly.

[para. 19][para. 20][para. 21] Additional strategic shifts include leveraging parallel platforms to accommodate users and creators seeking continuity, while TikTok’s existing compliance measures have contributed to considerable operational expenditures. ByteDance remains resolute in maintaining its substantial presence without forfeiting fundamental control or exceeding stipulated regulatory thresholds.

[para. 22][para. 23][para. 24] The complexity of TikTok's negotiation scenario emphasizes the strategic friction between national interests, corporate strategies, and the broader socio-political dynamics at play, highlighting TikTok’s critical positioning within the U.S. digital ecosystem and marking it as a pivotal case of cross-border regulatory governance.