India has banned TikTok.  the US can learn from this.

India has banned TikTok. the US can learn from this.

India has banned TikTok.  the US can learn from this.

  • The future of TikTok in the US is becoming increasingly uncertain as pressure to ban it mounts.
  • To see what could happen if the US banned TikTok, analysts advise taking a look at India.
  • India’s TikTok ban was a huge opportunity for Meta, YouTube and Snapchat.

It hardly seems possible that TikTok could be banned in the USA. But it’s becoming more likely every day.

Mark Mahaney, the respected internet analyst at Evercore ISI, told Insider that while TikTok doesn’t have a “more than 50 percent chance of being banned” in the US, the percentage has increased over the past six months as verification has deepened the app’s ties to ByteDance, its China-based owner.

And American regulators have one big thing to point to as they seek this dramatic action. In a recent interview with Indian newspaper The Economic Times, Brendan Carr, a commissioner at the Federal Communications Commission, described India’s ban on TikTok as an “incredibly important precedent” and a “guiding star” for other countries.

Why did India ban TikTok?

In 2020, India banned the app outright after a geopolitical row with China, invoking a law that allows the government to block websites and apps in the interests of the country’s “sovereignty and integrity.”

Mark Shmulik, a Bernstein analyst, said India’s actions are “a useful proxy” as political pressure mounts on the US to follow suit, given that it is a huge market similar to that of the US that has “a Banned app that is at the peak of its popularity.”

What we’ve learned from the situation in India, analysts say, is that banning TikTok would likely be a huge boon for rivals like Instagram, YouTube, and Snapchat — but it would also make doing business internationally more difficult.

What happened when India banned TikTok?

In the summer of 2020, India banned 59 Chinese apps including TikTok, WeChat, Weibo and QQ, an instant messaging service operated by internet giant Tencent. At the time, TikTok had nearly 200 million users in India and considered the country its largest market outside of the US.

Analysts at Bernstein wrote in a note to clients that the TikTok ban did not slow the adoption of short-form video content on social media and gave competitors like Snapchat, Instagram Reels and YouTube Shorts more market share. It also made way for the rise of several native Indian apps.

“Instagram was the biggest beneficiary of the ban,” write the Bernstein analysts. “As India is a prime market for the big internet players with a lot of monetization potential, Meta and Google have capitalized on the void left by TikTok.”

At the time of the ban, business experts told Insider that it had consequences for Indian citizens employed by the apps as engineers, customer service representatives, supervisors and salespeople.

These experts have also suggested that India’s decision to impose such a sweeping ban on apps owned by companies in another country could deter international investment in the country’s fast-growing tech sector. After all, the government has proven its power to remove access to apps without much recourse.

“The decision to ban was made far too quickly without considering the impact it would have,” Amit Jangir, a co-founder of Karbon Card, a Shanghai-based fintech startup, told Insider in 2020. “I fear that many overseas investors will now hesitate or hesitate as the policy changes can be so drastic.”

While the situation wouldn’t be exactly the same, the US could face these questions if it decides to ban TikTok.

Will the US ban TikTok?

How many users TikTok has in the US is unclear. In September 2021, TikTok announced that it has 1 billion active users worldwide and has since grown in popularity.

State governments in the US have banned the use of TikTok on government devices, and the federal government recently banned it on all federally owned devices over concerns that Chinese authorities could access sensitive information through the app. Some Wall Street analysts believe companies will ban TikTok on company-owned devices if they haven’t already.

Carr and others, who are calling for a total US ban on TikTok, have suggested that the only way to solve the national security issue raised by the app is with a so-called blanket ban. Carr is notably the senior Republican in the FCC, so his views don’t necessarily reflect those of President Joe Biden or his administration.

Several analysts have argued that since TikTok is hugely popular with young voters who tend to skew Democrats, the Biden administration is unlikely to want to risk losing it to a ban.

However, analysts also believe the situation could change dramatically depending on the state of US relations with China.

“In a way, it’s very closely related to the US-China government relationship,” Mahaney said. “So if this continues to get worse, I can’t imagine that won’t increase the chances of some kind of TikTok ban.”

Do you have a tip or thoughts about TikTok? Contact this reporter via email at pzaveri@insider.com or Signal at 925-364-4258. (PR pitches by email only please.)

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