Week in Review - The TikTok nuclear option

Saturday, September 12, 2020 • By Lucas Matney

Howdy friends, welcome back to Week in Review. This past week, I wrote about all of the little firewalls and this week I’m talking about the TikTok nuclear option.

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The Big Story

I feel like since the Microsoft deal was first floated as an option, it’s been a foregone conclusion that this TikTok saga would reach a logical capitalistic ending with TikTok continuing onward instead of being purged from phones and popular culture.

But as Beijing and D.C. grapple with the particulars, I increasingly think that this is all heading towards an outright ban of the app. For Trump, this seems like an ideal outcome. A shot across the bow of Beijing and a strike at a rising Chinese tech giant.

I don’t really believe that the courts will strike down a TikTok ban, mainly on the basis that it seems likely that the federal government will just be able to reverse the Musical.ly sale to Bytedance and kill the app that way on national security grounds, something it may be able to do because Musical.ly never opted for a national security review at the time to approve the sale.

On that same note, I am confident that a sale to Microsoft would ultimately not be in the company’s best interest. Microsoft has acquired and ruined many a consumer company and while it sees great potential opportunity in TikTok, as is evident, it also needs to look in the mirror and realize that it can’t handle this task. If this deal falls apart, it will only prevent Microsoft from giving a Chinese company billions and wasting billions more on a doomed project.

I’m also less certain that it would all amount to some giant waste in corporate value if the app were just dissipated. I do think that there is an awful lot of value tied up in the TikTok economy but if it were banned I’m fairly sure that a good deal of that value would just be ghost transferred into Facebook’s bottom line which I am confident would be able to suck up the residual value with its TikTok clone Reels.

I will end this all by saying that I don’t personally think TikTok should be banned outright stateside, and I think that an (increasingly likely) future Biden administration would likely reverse any nuclear course of action the Trump administration took. But if the app faced an outright ban and was purged from app stores, leaving die-hards to migrate to VPNs and a web app for months, it would be catastrophic to the platform and I doubt it would ever recover.

Image Credits: SOPA Images / Getty Images

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Image Credits: Microsoft

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