Congress, tell me you don’t trust TikTok without telling me you don’t trust TikTok.

On Thursday, the CEO of TikTok, Shou Chew, testified before an adversarial congress to address the mounting scrutiny against the wildly popular social media app. The primary focus of the hearing addressed national security concerns about the app’s data collection and its potential to be shared back with ByteDance, its Chinese owned parent company. Other focal points included the app’s safety, spread of misinformation and harmful effects on the mental and physical health of teens.

Chew staunchly defended TikTok claiming that consumer data has never been shared, reinforcing the company's US and Singapore based operations, and alleging a large majority of concerns were ‘hypothetical’ and industry wide. There was little new information shared other than what has been increasingly discussed in recent months. Chew primarily focused on what he felt were misconceptions and emphasizing the app’s independence from China. To say these statements fell on deaf ears would be an understatement with lawmaker retorts ranging from calling the claims ‘preposterous’ to preventing the CEO's response to certain lines of questioning.

As the dust settles, here are our 3 predictions for what the future holds for the most downloaded app in the United States for the past two years.

The App Is Here To Stay (For Now)

TikTok has over 150 million users in the United States, which means it is used by almost half of the country. In terms of monthly active users, they are two times the size of Twitter and only 30 million shy of Instagram. Impressive for an app that has only existed for 5 years and started with acquisition of Musical.ly. And it’s not all Gen Zers. While they make up nearly half of the platform with 46 Million users, Millennials are not far behind with 34 million users and Gen X and Baby Boomers falling at 12 and 7 Million, respectively.

What’s more impressive than the app’s quick rise to fame is the cultural impact it has on society at large. The app claims “it starts on TikTok,” a bold proclamation that much of the content you see on your other social feeds and the internet at large originates on their platform. A large majority of you reading this can likely verify this claim, but that’s just the tip of the iceberg.

The hashtag #tiktokmademebuyit has had a massive impact on commerce, instantly selling out products that go viral and making chains like Trader Joes and CVS include instore promotions highlighting “As Seen on TikTok”. It’s impact on viral trends, music popularity, and pop culture at large also cannot be understated with many of the songs that gained popularity on the app making the Billboard Top 100.

We get it, the app is popular, but is that enough to convince lawmakers to abolish it? Not necessarily, but it is enough to warrant additional consideration. It forces lawmakers to weigh pros and cons of banning the app and the potential impact it may have to their re-election campaigns. The hearing itself reflected the necessary grandstanding from members of congress, many of whom lacked enough education on the matter to ask insightful questions. Citing their concerns doesn't always lead to new laws.

Its important to note that even if the app was banned, it would still remain on everyone’s phone who already downloaded it. The tangible next steps from a ban would be that the app is removed from the App Store and Google Play to prevent future downloads. For current users, it would eventually become unusable as the app couldn’t sustain future operation system updates. Remember, the app already has over 150 million users, a ban would stop the bleeding but not heal the wound.

Another key issue we see with successfully enacting a nationwide ban is the lack of actual evidence. We aren’t claiming that that possibility of our data being shared with China doesn’t exist, nor that it isn’t even highly likely. We just don’t have any actual proof that it is occurring, which hurts arguments for a ban and public support of such a drastic action.

The reality is that a lot of individual users aren’t as concerned about sharing their data as a governmental entity might be. In fact, a study found that while 73% of households were concerned with online privacy, only 35% of them let those worries restrict their online usage. General concerns about data certainly exist in the United States, especially when it comes to use by foreign actors, but the lack of proof only hurts the motivation needed to convince the masses for change.

We do expect Congress to act, but feel the app’s popularity, difficulty to effectively eradicate it, and its inseparable convergence with culture will prevent a nationwide ban of its use entirely.  

Regulation Is Coming: What, How, And When Is Anyone’s Guess

The hyperfocus on TikTok from the US, and the world at large, is too much to ignore and we feel its potential risk to national security will warrant eventual action from lawmakers. We’ve already seen the app banned from federal government devices, some state government devices, and a growing number of university campuses.

It’s also a rare issue where there is bi-partisan interest, however neither side of the aisle has uniform support (or even agreeance on what the best next steps should be). The US isn’t alone in their concern, either. The European Union, India, Taiwan, New Zealand, Australia, Denmark, Belgium, and Canada have all issued or considering orders to banning the app’s usage in some way shape or form.

The call for action on social media companies also isn’t new; parts of the TikTok hearing was eerily similar to Mark Zuckerberg’s ambiguously defensive testimony in 2018 on behalf of Facebook. During Facebook’s hearing, congress seemed almost as angry, but far less educated on the internet at large, the implications of widescale consumer data usage by a foreign actor, and what regulation would even look like for a tech giant operating in the infinite vastness of the cyber web.

5 years later, we are better educated but still lack any sort of progress on meaningful legislation alternatives outside of all or nothing measures when it comes to tech regulation. While nothing meaningful came out of Zuckerberg’s testimony, its important in that it served as a primer for action to be taken on TikTok and a narrative to be built on the harmful potentials of social media misuse.  

If an all-out ban isn’t happening, what options exist to keep the app functional but safe? Our prediction is that a force of sale will be endlessly discussed but ultimately fail to come to fruition.  

In order for a sale to occur, there are a seemingly countless number of hurdles and legal parameters that exist with high risk that the deal still wouldn’t go through. The most glaring is China’s immediate response to the testimony stating a ‘firm opposition to any forced sale of the app,’ indicating their stance that they can weigh in based on the technology used within the app.

The US Committee on Foreign Investment will also play a role as they have already been reviewing the ability of TikTok to operate in this country since the acquisition years ago. Not to mention the fractional ownership of the company which has a mixed bag of ownership including public investors, employees, founders, and 1% of a Chinese state owned company.

Let’s not forget the price tag, either. Initial estimations of the sale range from $40-100 Billion dollars which severely limits the potential buyer list. Oracle could be a likely candidate given they already have a deal in place to store data, their already deep presence within the advertising analytics space, and financial acumen to be a part of the conversation, but the list of companies with the actual ability to make the purchase remains slim. Anti-trust concerns would reduce the list even further with competitors like Meta and Google likely ruled out from the beginning.

Without a force of sale, we think TikTok will double down on Project Texas, a $1.5 billion dollar plan in partnership with Oracle to protect the user data of Americans by housing it on US soil with third party regulatory oversight lead by Americans. While Congress was unimpressed by this during the hearing, we feel their involvement in this project, including potential governmental oversight, will be the only realistic measure to protect data privacy while keeping the app alive in the US.

Regardless of next steps, this will be one of the most geo-politically complicated pieces of regulation in the modern world, and one that certainly won’t have clear resolution anytime soon.

Industry Wide Platform Regulation Is Imminent

Yes, TikTok collects your data. Yes, they do this even when you are not on the app. Yes, they use this data to build targetable consumer profiles for advertisers, give the app a more personalized experience, and ultimately keep you scrolling and engaged for as long as possible. No, they are not the only ones who do this.

Giving up your personal data has become an unspoken deal in exchange for endless entertainment that social media companies provide us through our own personalized experiences. This is the primary reason many of the members of congress at TikTok’s hearing continually notated that so many of these problems were not specific to TikTok, but the industry at large. 

Aside from the potential data sharing with China, a large majority of TikTok’s data practices are commonplace among the Tech Giants like Meta and Google, who have actually pioneered much of the technology that allows it. TikTok allowing a third party to oversee their algorithm is actually a huge, and wholly unique, step in the right direction for oversight and monitoring of data sharing.

Unfortunately, platforms have proven to be unable to regulate themselves when it comes to data privacy and protecting its users. Meta, for example, is still recovering from its Cambridge Analytica scandal where user data from over 87 million users (and 71 million Americans) was illegally shared and used for voter profiling. Let’s also not forget the whistleblower in 2021 who went to Capitol Hill to demonstrate how Facebook consistently prioritized profit over protecting its users, including encouraging divisive content and ignoring its own data about the harms Instagram is causing teenagers.  

We feel we are finally reaching breaking point for so many of the complaints issued against social media companies It’s taken over a decade after the rise of social media for members of congress to begin to understand how this industry works, its potential for harm and what safety measures and regulation could even look like. This is most clearly shown with a number of state sponsored bills including California’s foundational Privacy act in 2018 and even a recent Utah bill preventing teens form using social media during the hours of 10:30 – 6:30 A.M., along with parental consent when signing up. While unclear how this will be enforced, many other states are also considering similar regulations to put rules on largely unchecked industry and to protect data usage and teens.

As state laws continue to go into effect, education on the industry continues to increase, and more data is collected, we feel that national legislation and regulation is coming to TikTok, along with its counterparts. While it will likely be another half decade before anything meaningful is passed at a national level, we predict a bill encompassing regulation on data sharing, protections for teen’s health and data, and adding responsibility for the information consumed on platforms is imminent.