March 27th, 2024

The race for TikTok: What a ban might mean for small business owners in U.S.

Malia Lazu

Banner Business sponsored by The Boston Foundation

Over the past year, lawmakers in the United States, Canada and Europe have focused their attention on the popular short-form-video social media platform TikTok. Backed by Chinese parent company ByteDance, the app has taken the world by storm, rising to fame during the initial stages of the pandemic in 2020. In the years that followed, TikTok expanded to offer not only digital entertainment, but also a platform for businesses to sell and advertise their products in an efficient and convenient manner. Amid the recent controversies surrounding the use of customer data, U.S. lawmakers are now pushing ByteDance to sell TikTok to non-Chinese owners.

Currently, roughly 34 states across the U.S. have successfully banned the application on government-issued devices. Throughout the past year, tensions have been on the rise between China and the United States concerning both countries’ desire for technological dominance. Although a ban has been in the works, said tensions have recently escalated.

Stating that the platform is a threat to our national security, lawmakers have pushed for legislation to limit (or even eradicate) TikTok use in the United States. As the news of the most recent such bill passing in the House 352-65 hit users’ timelines, they began voicing their opinions on the matter across all media platforms. While for some, this ban may mean getting some more alone time away from their screens, many individuals and small businesses have made it clear they rely heavily on TikTok to both raise brand awareness and move product. Influencers continue to speak out every day to call attention to the clear threat this poses for them and their means of support.

RuQuan Brown, a Harvard senior studying Black history, is an activist and dynamic influencer, and he shared how this ban would affect him: “When I heard about the potential TikTok ban, I was disappointed because it could negatively impact a revenue stream in my businesses,” he said.

Brown acknowledges that while the U.S. government is most likely aware that many rely on the social media platform as a source of income, it comes as no surprise to him that they are attempting to assert their dominance and control over TikTok while simultaneously threatening individuals’ livelihoods. “Underwhelming and disappointing legislative news has a 400-year paper trail in the U.S.,” he said.

According to a recent Washington Post article, more than 7 million American businesses rely on TikTok and its shop feature to market and sell their products. A fatal hit like this ban would effectively eliminate their access to thousands of potential customers and a free marketing platform. Oxford Economics has reported that in 2023, small-business owners greatly benefitted, as TikTok has grown their revenue by $14.7 billion. Oxford Economics also reports that as a result of TikTok’s presence in the country, $24.2 billion was contributed to the U.S. GDP.

With such staggering numbers, it is easy to imagine how much of a negative impact a ban would have of the U.S. economy as a whole. When a critical revenue stream used by millions of business owners everywhere is erased, the result could be life-altering.

“My biggest concern is the national economy. So many small and big business owners that contribute to the economic well-being of the country will have their businesses negatively impacted because of the ban, as it’s a Silk Road of sorts,” Brown said, adding, “Ask our ancestors how wise it is to shut down trade routes.”

TikTok’s impact on our nation is undeniable, yet lawmakers elected to work on behalf of the people continue to brand it as a threat to national security, while there are plenty of American-owned platforms exploiting user data that have skirted by without a ban. A blow like this would truly hit the U.S. economy hard, but it would hit small business owners even harder.