The US House of Representatives passed a bill today that moved the country closer to an outright TikTok ban. The bill passed by 352 votes to 65 and now moves to the Senate which will decide the fate of the app used by 170 million Americans.

It also has significant implications for Australia where local lawmakers have indicated in the past they will be strongly influenced by any US moves to implement a ban.

In August last year the Australian Select Committee on Foreign Interference through Social Media recommended that if the US government forces ByteDance to divest of TikTok, the Australian government should consider doing the same. But the platform has reportedly spent $100m in a bid to curb those powers.

That local Parliamentary investigation was scathing of the attitude and behaviour of TikTok, and fellow Chinese digital giant WeChat, with the committee blasting both firms in its report.

"TikTok was evasive" and WeChat's answers labelled "disingenuous". "WeChat showed contempt for Parliament", per the report.

Across the APAC region, TikTok is on a tear at the moment, commercially. Campaign Asia recently reported, "TikTok live commerce, for example, was trending towards an incredible US$20bn Gross Merchandise Value (GMV) for 2023 in SEA, and it's growing at a staggering compound growth rate of 30 per cent a month."

Singapore investment banking firm North Ridge Partners noted that "TikTok is building a strong lead in the live commerce sector," whereas global giants like Meta came and went quickly in live commerce and local APAC players like Lazada and Shopee are being overtaken by superior execution.

US moves

While the US Bill moved quickly through the US House of Representatives, it could take longer to pass through the Senate, according to observers, although it has the fulsome and bipartisan support of the two top members of the Senate Intelligence Committee, Democrat Mark Warner and Republican Marco Rubio.

At issue, is the ownership of Bytedance, which is effectively controlled by the Chinese Communist Party. Data harvesting is a concern but the bigger issue is the use of TikTok as a channel of political influencing around the world- basically a platform for propaganda and potential disinformation.

US concerns were explained by Federal Bureau of Investigation chief Christopher Wray in testimony to the House Intelligence Committee earlier this week where he told lawmakers, "Americans need to ask themselves whether they want to give the Chinese government the ability to control access to their data, whether they want to give the Chinese government the ability to control the information they get through the recommendation algorithm."

The US government has been much more aggressive in recent years against what it sees as China's ability to threaten it through digital technologies, having raised concerns about connected cars, AI, and even cranes at US Ports.

It already bans TikTok on government-owned phones and other devices. The European Union's top policy-making bodies likewise have enacted bans. But the most significant move against TikTok in recent years was taken by India which first issued a temporary ban in 2020, which it made permanent in 2021. At the time TikTok was believed to have 150 million users in the country.

At the time of writing TikTok has not offered a formal response however media reports suggest the company is viewing it as a clear signal the US government wants to ban the app.

Antitrust

According to Forrester VP, Research Director Mike Proulx is available for interviews to discuss this development. “Despite increased antitrust measures in Congress, a ban on TikTok will hand an effective monopoly to Meta’s Reels — the company’s short-form video product. Forrester’s Youth Survey, 2023, saw an 11-point year-over-year increase in Instagram Reels usage: Nearly a third (30%) of US teens now use Reels at least weekly.

"Absent of TikTok, users will flock to Reels, period — leaving just YouTube Shorts as its sole competitor. That means Meta is the likely beneficiary of TikTok’s ad revenue in a TikTok-less world," as well, he said.

Forrester data shows that 67 per cent of US B2C marketing decision-makers plan to increase investment in TikTok this year, while only 7 per cent indicated their organization plans to decrease investment.

Cue aggressive lobbying.

- By Andrew Birmingham