Will Tiktok be banned already? Via Investing.com

Investing.com-The debate over whether to ban Tiktok in the US has reached a critical juncture, as developments raise the stakes for the popular short-video platform.

The US Supreme Court recently upheld a law requiring Tiktok to divest its Chinese parent company, Bytedance, or face a ban on US operations.

While this ruling is pivotal, the situation remains highly uncertain due to the complex interplay of legal, political and corporate factors.

According to analysts at MoffettNathanson, the odds of a Tiktok ban are not as clear as they may appear.

Prediction markets like Polymarket put the probability at 80%, reflecting a sentiment driven largely by concerns about national security.

However, other factors complicate the picture. President-elect Donald Trump has expressed opposition to the measure, which may indicate a more lenient approach from the incoming administration.

In December, Trump requested a pause in enforcement of the law to explore alternatives, although that effort was overturned by a Supreme Court ruling.

If there is a ban, its enforcement mechanisms will depend on major players in the technology ecosystem, including App Store operators such as Apple (NASDAQ:) and Google (NASDAQ:) and Internet service providers (ISPS).

Both Apple and Google are expected to comply by removing Tiktok from their platforms, making it inaccessible to new users.

Even for existing users, the application may become inoperable over time as ISPs and service providers cease support for updates and maintenance.

Reports from Bytedance indicate that the company may completely shut down its US Tiktok operations if the ban is upheld.

Despite these potential outcomes, Moffett-Nathanson emphasizes the fluidity of the situation.

The incoming administration may issue an executive order delaying the ban or even seek to repeal the law altogether.

Tiktok executives appear to share this optimism, confident that any disruptions may be temporary. This scenario leaves room for the platform to re-implement it, perhaps after a disposal or sale.

For competitors like Meta (NASDAQ:) and YouTube, a Tiktok ban could present opportunities.

Instagram’s Meta Reels and YouTube Shorts are well-positioned to absorb displaced users and advertisers, which could boost their revenue by 3-5% and 10-15%, respectively.

Snapchat, while less equipped with short-form video offerings, could still benefit by capturing some of Tiktok’s user base, especially among younger demographics.

However, the initial market reaction to the Supreme Court ruling indicates doubt about the permanence of the ban.

Shares of Meta and Snap fell shortly after the announcement, reflecting broader uncertainty about how long Tiktok’s absence will last and whether competitors will benefit meaningfully. This reaction may be wary of the twists that await in this unfolding saga.