The holiday season is always the busiest for Paul Tran’s Atlanta-based skin care business Love & Pebble. But his attention is elsewhere as the future of TikTok — the source of about 90% of his sales — remains uncertain.
TikTok is still racing against the clock to challenge a law signed in April that bans the social media platform from operating in the U.S. if it cannot break its ties with its China-based parent company ByteDance and sell to a government-approved buyer by mid-January.
On Dec. 6, a federal appeals court rejected TikTok’s petition to overturn the law, siding with the Justice Department’s position that TikTok poses a risk to national security because of its connections to China. Officials say that Chinese authorities can compel ByteDance to hand over information on TikTok’s U.S. patrons or use the platform to spread, or suppress, information, The Associated Press reported. However, the U.S. hasn’t publicly provided examples of that happening, according to AP.
TikTok and ByteDance, which argue that the law violates the First Amendment, said in a statement last week the two companies are preparing to take their case to the U.S. Supreme Court. Days later, TikTok asked the U.S. Court of Appeals for the District of Columbia Circuit to temporarily freeze enforcement of the law until the high court can review its appeal. In a court document filed Monday, the social media platform said a delay in enforcement would give the Supreme Court “breathing room” to conduct an orderly review and the incoming administration time to determine its position.
Even creators have pursued their own legal action to block the law. Tran, who has used TikTok to market his brand since 2021, filed a separate suit against the U.S. government with seven other social media creators earlier this year. The creators in the suit, who come from various professions, political backgrounds and states, argue the law will “shutter a discrete medium of communication that has become part of American life,” and, in turn, violates their First Amendment rights, according to their complaint filed in the U.S. Court of Appeals in Washington, D.C.
“I’m praying for a miracle at this time,” Tran said, who runs his business with his wife. “We have so much riding on this platform.”
TikTok posits in its court documents that 170 million Americans — more than half the country — use TikTok every month. Many purely engage with the app to entertain themselves. But thousands of others rely on the app as a primary source of revenue, as TikTok has morphed from solely a social networking app to a budding e-commerce marketplace within its 8-year lifespan.
A ban of the app in the U.S. has the potential to upend what is called “the creator economy” — the network of both influencers and brands making money from the content they post to social media platforms that Goldman Sachs calls “one of the biggest developments of the digital age.” TikTok is one of the most popular social media networking platforms by users across the globe, making it a key player in this arena.
On TikTok, influencers can monetize their content through the company directly, which compensates eligible creators based on views, or by partnering with brands, which pay the creator directly to advertise their products in videos. Businesses can also use TikTok to engage with customers and drive revenue by selling items directly through TikTok Shop, the app’s integrated e-commerce platform that launched last year.
An April economic impact study commissioned by TikTok found 7 million businesses used the app as of the first quarter of 2024. Their investments in paid advertising and marketing drove $14.7 billion in revenue during 2023 and supported about 224,000 jobs in the U.S. Businesses in Georgia using TikTok created the seventh-highest number of jobs, totaling 7,500 direct, indirect and induced jobs, according to the report from Oxford Economics.
Tran started posting videos to TikTok in 2021 to advertise Love & Pebble products. He and his wife found a much broader audience with TikTok compared to other apps and the company sold out of its entire inventory within the first month, a difficult feat for the competitive skin care industry. They eventually began selling their products directly through TikTok Shop, which now accounts for about 90% of his sales. Along with Tran and his wife, the company has three full-time employees.
Tran said he hopes the Supreme Court will hear their argument and President-elect Donald Trump will step in to either delay enforcement or pressure lawmakers to repeal the law. For now, the company is working across its other social media platforms — Instagram, Facebook and Twitter — to market its products.
Trump will be sworn in the day after the ban is supposed to go into effect. During his first term, Trump unsuccessfully tried to ban the app due to privacy concerns. But in recent months, he’s turned a 180, writing on Truth Social in September that he would “save TikTok” if elected. But his Cabinet picks are divided in their support of the potential ban, making the direction the incoming administration will take even more unclear.
“TikTok is our main platform where we’ve grown our business, grown our American dream,” Tran said. “To rip it away, that would be devastating to us. There’s heavy collateral. This app is so ingrained into the culture now.”
— The Associated Press contributed to this report.
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