Is Tiktok Really Banned? by Investing.com

Investing.com – The debate over whether TikTok should be banned in the United States has reached a critical stage, with developments raising the stakes for the popular short video platform.

The US Supreme Court recently upheld a law requiring TikTok to divest from its Chinese parent company ByteDance or face a ban on US operations.

While this decision is critical, the situation remains highly uncertain due to the complexities between legal, political and organizational issues.

According to analysts at Moffett Nathanson, the chances of a Tik Tok ban are not as simple as they seem.

Prediction markets like Polymarket put the probability at 80%, reflecting sentiment largely due to national security concerns.

However, other factors complicate the picture. President-elect Donald Trump has expressed opposition to the move, which could signal a more lenient approach from the incoming administration.

In December, Trump requested a pause in the law’s implementation to explore options, though that effort was rejected by a Supreme Court decision.

If the ban goes ahead, enforcement strategies will depend on key players in the technology ecosystem, including app store operators such as Apple (NASDAQ: ) and Google (NASDAQ: ) and Internet Service Providers (ISPs).

Both Apple and Google are expected to comply by removing TikTok from their platform and making it inaccessible to new users.

Even for existing users, the app may not work over time as ISPs and service providers stop support for updates and maintenance.

ByteDance reports suggest that if the ban is upheld, the company could shut down TikTok’s US operations entirely.

Despite these possible outcomes, Moffett Nathanson emphasizes the fluidity of the situation.

The incoming administration may issue an executive order delaying the ban or even seek to repeal the law entirely.

Tik Tok executives seem to share this optimism, confident that any disruption will likely be temporary. This scenario leaves room for the platform to relaunch, which may be after a divestiture or sale.

For competitors like Meta (NASDAQ:) and YouTube, Tik Tok’s ban could present opportunities.

Meta Instagram Reels and YouTube Shorts are well positioned to absorb displaced users and advertisers, increasing their revenue by 3-5% and 10-15% respectively.

Snapchat, while armed with shorter video offerings, could still benefit from capturing some of TikTok’s user base, especially in the younger demographic.

However, the initial market reaction to the Supreme Court decision shows doubts about the ban’s sustainability.

Shares of Meta and Snap fell shortly after the announcement, reflecting broader skepticism about how long Tick’s absence will last and whether competitors will meaningfully benefit. This reaction may be a forewarning of future volatility in this unfolding saga.