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TikTok Ban Becomes Law as Social Commerce Takes Off

TikTok building

President Joe Biden has signed a law banning TikTok unless it’s sold within a year.

As NPR noted in its report Wednesday (April 24), the law is the largest threat so far to the popular social media platform in the U.S., though it will likely not immediately disrupt its business, due to pending legal challenges and other delays.

The law gives TikTok’s China-based owner ByteDance 12 months to sell its stake in the company or risk the platform being shut down.

Biden signed the bill after its passage by the House and Senate over the last few days, with supporters arguing the threat of a ban is necessary for national security concerns. The ban was part of a larger piece of legislation that also included aid to Israel and Ukraine.

“Congress is not acting to punish ByteDance, TikTok, or any other individual company,” Sen. Maria Cantwell (D-Wash.), chair of the Senate Commerce Committee, said in remarks on the Senate floor Tuesday (April 23).

“Congress is acting to prevent foreign adversaries from conducting espionage, surveillance, maligned operations, harming vulnerable Americans, our servicemen and women, and our U.S. government personnel.”

In a statement provided to PYMNTS over the weekend, TikTok accused Congress of “using the cover of important foreign and humanitarian assistance to once again jam through a ban bill that would trample the free speech rights of 170 million Americans.”

The statement added that the ban would “devastate 7 million businesses, and shutter a platform that contributes $24 billion to the U.S. economy, annually.”

As noted here earlier this month, the possibility of a ban has not stopped brands from levering TikTok’s massive audience of younger consumers to generate engagement and sales.

“TikTok users tend to be highly engaged with the platform, spending significant amounts of time watching and interacting with content,” that report said. “This high level of engagement can increase the visibility of branded content and help brands connect with their target audience in a more meaningful way.”

Beyond that, TikTok has a thriving influencer community, many of whom have large, loyal followings. Teaming with those influencers can help brands put their products in front of their target audience more effectively and give them greater credibility with potential customers.

And many of those customers — younger ones especially — are using social media as a way to shop, as PYMNTS wrote recently.

Research by PYMNTS Intelligence finds that 68% of Gen Z consumers searched for products on social media, and 22% ultimately completed a purchase, the highest rate of social commerce across all age groups. In addition, 75% of Gen Z consumers said they plan to make purchases on social media, versus less than half of the overall sample.