The TikTok Power Play

The Arbiter | Vol 2., No 2.?

The battle for TikTok 's future is a study in the mechanics of raw American power. At stake is TikTok’s immense value—tens or hundreds of billions—and its unparalleled grip on the attention of the world’s most influential consumers. To make sense of this unfolding drama, it helps to understand the players, their motivations, and their respective levers of power.?

Is TikTok holding all the cards??

At times, it seems so. TikTok’s stakes are existential: If it loses, it dies. But ByteDance has made clear that while the value of TikTok’s underlying algorithm is enormous, revenue from U.S. users is barely more than a rounding error on its parent company’s global balance sheet. This gives TikTok leverage: it can maintain the illusion—which may very well be the reality—that ByteDance is willing to shut down America’s most addictive video app.?

With legal avenues exhausted, TikTok’s options are stark: total surrender (i.e. shutting down the app) or a deal with the Trump administration. Over the weekend, ByteDance offered America a taste of life without TikTok, seemingly betting that the backlash will strengthen its position at the negotiating table. The Biden administration called the brief outage “a stunt.”?

Is Donald Trump holding all the cards??

Trump would like us to think so. The TikTok ban was his idea in the first place, but since a sudden about-face he has positioned himself as TikTok’s savior, claiming he alone has the dealmaking prowess to resolve the standoff. Yet he’s kept TikTok guessing, hedging his enthusiasm to keep the company at his mercy.?

Trump’s leverage, however, has limits. It’s unclear if he has the authority to halt the ban. His camp has suggested two unprecedented options. The first is an executive order granting relief—maybe a delay of the ban, or a more lasting circumvention. However, any such order would almost certainly be found unconstitutional. The second is a provision in the law allowing a 90-day extension—but only if meaningful progress on a deal was underway before the ban took effect. Now that the ban is active, these paths seem closed. Trump could direct the Justice Department not to enforce the law, but such a move would be legally fraught and politically explosive (Truth Social).?

Still, Trump remains TikTok’s best hope. On Sunday, he proposed partial U.S. ownership of TikTok, stating, “I would like the United States to have a 50% ownership position in a joint venture.” But even this might not satisfy the law, which requires an interdepartmental review to confirm that TikTok isn’t controlled by a foreign adversary. Trump’s power hinges on his ability to make a deal that satisfies the law—and that, in turn, is what’s driving TikTok’s public courtship of the incoming president.??

Are Apple and Google holding all the cards??

As TikTok’s battle drags on, Apple and Google quietly gain leverage. After TikTok’s brief outage, the app—along with ByteDance’s Lemon8 and CapCut—remains absent from their app stores. TikTok came back online only after assurances from the Trump administration that it would not enforce the law’s massive fines against technology partners—i.e. Apple, Google, and Oracle—for hosting the banned app (NPR).?

But those assurances don’t protect Apple or Google from legal liability: $5,000 per user per day. Were Apple to return TikTok to the app store, Trump would have enormous leverage over the company—by his ability, or even just his threat, to enforce the law at any point in time. By keeping TikTok off their platforms, they avoid exposure while gaining leverage of their own. Without app store access, new downloads stall, and existing users eventually fall off. Working with a transactional administration, Apple and Google are in a position to name their price to help bring the app back online—remaining pivotal players in the broader resolution, whether they like it or not.??

Does Congress hold all the cards??

In theory, Congress could reverse the ban—by amending or repealing the law. But its willingness to do so remains uncertain. Leading up to the ban, some lawmakers who had pushed the law appeared to come down with an acute case of buyer’s remorse. Senators Rand Paul and Ed Markey proposed extending the deadline by 270 days. Senate Minority Leader Chuck Schumer urged the Biden administration to trigger a 90-day delay, but the White House declined—citing a lack of progress on a deal. Biden then punted enforcement to Trump.?

If Trump finds his options exhausted, he could turn to the Republican-controlled Congress. In that case, leaders on both sides of the aisle would take center stage—with immense leverage to influence any eventual deal for TikTok’s sale. Yet the TikTok bill continues to defy politics and ideology. After all, Senator Markey signed the ban before he moved to delay the ban; his request for delay was blocked by a single Republican senator. In the Boston Globe this weekend, Democratic U.S. Congressman from Massachusetts Jake Auchincloss published an op-ed demanding that the ban be enforced. In other words: Congress may hold the ultimate leverage—but only if it can overcome its own divisions.?

Is the Chinese government holding all the cards??

When Congress passed the TikTok ban, it argued that ByteDance and the Chinese Government are essentially one and the same—a claim that’s not strictly accurate but not entirely off base, either. Any sale of TikTok would require Beijing’s approval, and any resolution would likely be shaped by broader U.S.-China relations.?

This adds a layer of complexity, since both China and Trump have other interests at play in the negotiations. Elon Musk previewed such a dynamic on X, noting his opposition to the ban but adding, “the current situation where TikTok is allowed to operate in America, but X is not allowed to operate in China, is unbalanced. Something needs to change.” Translation: show us your quid, and we’ll pro your quo.?

Are TikTok’s users holding all the cards?

We’d like to think so, history suggests otherwise. How much leverage did Twitter’s users have when Elon Musk bought the platform? Ultimately, not much—though many voted with their feet and abandoned the platform after his takeover. TikTok’s users face a similar challenge, compounded by ByteDance’s apparent willingness to shut the app down rather than sell.?

Even if users wanted to push for a sale, they have little incentive: a sale would likely mean losing TikTok’s addictive “For You” algorithm. Still, ByteDance is betting that users can influence their political representatives, creating another pressure point on Trump and Congress. If TikTok’s creators, small business users, and viewers (along with their parents) start calling their representatives en masse, it could shift the calculus in Congress—and the temperature of the negotiations.?