Amidst speculation of a potential ban, TikTok, the popular short-form video app owned by ByteDance, has released an economic impact report highlighting its contribution to U.S. small businesses. According to the report, the platform generated an impressive $14.7 billion in revenue for small to mid-size businesses (SMBs) and supported a total of $24.2 billion in economic activity through their use of TikTok last year.
The report also notes that over 7 million U.S. businesses rely on TikTok and that small business activity on the platform supported 224,000 jobs in 2023. Of those, 98,000 jobs were directly within SMBs on TikTok. Notably, California, Texas, Florida, New York, and Illinois were the states with the largest economic impacts.
The study, performed by the economics forecasting group Oxford Economics, analyzed SMB activity on TikTok, including ad spend and ROI, and utilized census data and other metrics to reach its conclusions. The timing of this report’s release is likely not coincidental, as U.S. lawmakers consider a possible ban on TikTok.
In March, a bill was passed in the House of Representatives that could potentially ban TikTok, and President Biden has stated that he would sign it into law if it also passes in the Senate. What is concerning to TikTok is that the bill has gained bipartisan support, passing the House with a vote of 362-65, despite former President Trump’s shifting stance on the matter. While the Trump administration initially sought to ban TikTok due to national security risks, Trump now opposes the ban, claiming that its competitors would benefit.
This shift in position from the previous administration has led Meta, the parent company of Facebook, to prepare for a potential future in which TikTok is either banned or spun off from ByteDance. Just yesterday, Facebook announced an update that supports a new video player on their social network. The update will recommend Reels, long-form videos, and Live videos, and will default to showing them in a vertical format reminiscent of TikTok.
In the event of a TikTok ban, other short-form video platforms like YouTube could experience a surge in popularity and potentially pave the way for startups competing in this space.
TikTok’s economic report serves as a clear attempt to argue for the app’s right to continue operating. The report highlights how small business activity on TikTok contributed $5.3 billion in tax revenue last year, primarily through its use as a marketing and advertising platform.
The company also presented several case studies to showcase how TikTok has helped drive sales, website traffic, and other forms of revenue for business owners.
This strategic PR move to tie the potential ban to the app’s economic impact is understandable, especially since a group of TikTok creators successfully got a judge to block Trump’s attempted ban in 2020. The creators argued that the ban would harm their professional opportunities, such as brand sponsorships and income generation.
Although TikTok has been using in-app messages to urge its users to call Congress and protest the possible ban, the bill still faces a challenging path to pass in the Senate, especially now with the Republican party’s leader reversing his stance.
