An advocate holds a sign for TikTok following a news conference outside the US Capitol in Washington, DC, US, on Tuesday, March 12, 2024.
Graeme Sloan | Bloomberg | Getty Images
TikTok in a court filing Monday warned that U.S. small businesses and social media creators would lose $1.3 billion in revenue and earnings in just one month if the popular app is effectively shut down in the United States on Jan. 19, under provisions of a law targeting national security concerns about its China-based parent company.
“Those numbers would only increase if the shutdown extends for more than a month,” said Blake Chandlee, president of global business solutions for TikTok, in that court filing.
Chandlee’s declaration came as his company asked a federal appeals court to temporarily block a law that would require app stores operated by Apple and Google, and internet providers to stop supporting TikTok on Jan. 19 unless its parent company ByteDance sells the app.
TikTok and ByteDance plan to ask the U.S. Supreme Court to overturn a recent ruling upholding the law, issued by the U.S. Court of Appeals for the District of Columbia Circuit.
“The Supreme Court should have an opportunity, as the only court with appellate jurisdiction over this action, to decide whether to review this exceptionally important case,” TikTok and ByteDance said in the filing, seeking a temporary injunction in the case.
The injunction, if granted, would allow the app to continue operating until the Supreme Court makes a decision to hear the appeal or not.
The filing also argued that “an injunction is especially appropriate” because it will give the incoming administration of President-elect Donald Trump, who will be sworn in on Jan. 20, the opportunity to decide if it wants to enforce the law.
If TikTok is effectively shut down in the United States in January, Chandlee wrote, American small businesses alone would lose more than $1 billion in revenue — even if the prohibitions are lifted after only a month.
“Almost two million creators in the United States would suffer almost $300 million in lost earnings, and TikTok itself would lose 29% of our targeted global advertising revenue for 2025,” Chandlee wrote.
He said that as of November 2024, more than 7 million U.S. accounts use TikTok to do business.
And “69% of these businesses say that using TikTok has led to increased sales for their businesses in the last year, and 39% say that access to TikTok is critical to their business’s existence,” he said, citing an economic impact report prepared for the company by Oxford Economics.
Chandlee also said in the filing that those businesses’ advertising, marketing and “organic reach on TikTok” contributed $24.2 billion to U.S. gross domestic product in 2023, with TikTok’s own operations adding another $8.5 billion to U.S. GDP.
The law TikTok wants blocked for now was passed by Congress and signed by President Joe Biden last spring after concerns about ByteDance’s alleged connections to the Chinese government.
In its unanimous ruling Friday, a three-judge panel on the appeals court in the District of Columbia rejected ByteDance’s argument that the ban would violate the First Amendment rights of 170 million U.S. users of the app, or other parts of the Constitution.
The panel, in its written opinion, said that the U.S. government “offered persuasive evidence demonstrating that” the divestment law “is narrowly tailored to protect national security,” and noted that TikTok “never squarely denies that it has ever manipulated content at the direction of the” People’s Republic of China.
