The platform now faces a critical January 2025 deadline after a US federal court upheld the controversial sell-or-ban legislation.

On December 6, a US federal court upheld legislation requiring ByteDance, the parent company of TikTok, to divest the popular short video platform’s US operations. A three-judge panel ruled that the law, which cites national security concerns tied to foreign adversaries, does not infringe upon First Amendment protections.

This decision imposes a tight deadline: TikTok must finalize its sale or demonstrate significant progress to the sitting president by January 19, 2025. Failure to comply will result in a nationwide ban.

TikTok criticized the decision in a statement, describing the ban as “censorship of the American people” based on “inaccurate, flawed, and hypothetical information.” The company warned that the ban, if enacted, would “silence the voices of over 170 million Americans here in the US and around the world on January 19, 2025.”

TikTok CEO Shou Zi Chew announced plans to seek a preliminary injunction to block the law, with the company also considering an appeal to the US Supreme Court. However, it remains uncertain whether the court will review the case.

The legal path to this moment has been swift. Earlier this year, the US Congress expedited the sell-or-ban legislation, which passed both chambers with overwhelming bipartisan support before being signed into law by President Biden. TikTok has vigorously resisted these measures, even using its platform to encourage US users to contact congressional representatives and voice opposition.

Despite the circumstances, TikTok still has potential avenues for negotiation.

A surprising development came with Donald Trump’s victory in the 2024 presidential election. Trump, who had initiated his own attempts to ban TikTok during his earlier presidency, publicly opposed Biden’s actions against the platform during his campaign. Following his election win, Trump reaffirmed his support for TikTok, signaling a potential policy shift.

According to WSJ, TikTok has sought guidance from Elon Musk on navigating US regulatory challenges. Musk, a known Trump supporter, is viewed by ByteDance leadership as a potential ally. Chew briefed ByteDance executives on these discussions, which were met with cautious optimism.

Additionally, the law provides TikTok with a one-year grace period, including a 270-day deadline for divestiture and an optional 90-day extension if the president confirms sufficient progress in the sale. This effectively extends the deadline to April 2025.

TikTok’s business operations remain robust despite its legal challenges. Just days before the court ruling, TikTok Shop reported record-breaking sales in the US during Black Friday, achieving over USD 100 million in single-day revenue—a threefold increase from the previous year. The platform also saw a 165% surge in shoppers during the Black Friday and Cyber Monday weekend compared to 2022.

While TikTok’s future in the US hangs in the balance, its growing user base and surging revenues underscore its continuing influence. Whether the platform can navigate this turbulent chapter and retain its place in the US market remains to be seen.

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