In the midst of a global pandemic, Trump has raised concerns for national security in relation to TikTok and WeChat. On Thursday 6th August, he released an executive order that would possibly ban Tiktok if it did not sell its assets to a US company (such as Microsoft) by 15 September.
So, what would the proposed ban actually mean? What’s going to happen to all the TikTok influencers? Could the same thing happen in Australia?
Here’s what you need to understand about this legal situation.
Why Is Trump Banning TikTok?
The order to ban TikTok was made on the basis that US data could be collected and handed over to the Chinese government for blackmailing purposes. The announcement was not popular for many reasons, one of them being that other US apps raise just as many security concerns.
In fact, you might be thinking: ‘How is this any different to apps like Facebook?’
Technically, it’s not. Generally speaking, a lot of modern apps collect our data, which is why we’ve become more cautious about what information we share. But it seems that Trump’s motives are more deeply rooted, and it may cost people their jobs.
What Will Happen To TikTok Users?
Banning TikTok will have some serious consequences for employees and app users alike. We’re looking at more than 1,000 US-based TikTok employees being stood down and losing their paychecks in the midst of a global pandemic. Landlords that provide for TikTok operations will also need to evict them as soon as the order comes into effect. With all this in mind, it’s clear that the TikTok ban will cause some pretty heavy losses.
The wording of the executive order is broad, banning ‘any transaction by any person’ with the parent company of TikTok. It is yet to be seen if a ‘transaction’ means a company purchasing ads on the app, or a user downloading the app or publishing content on the app. Either way, the ban is likely to decrease TikTok’s popularity by making it more difficult for users in America to access it.
The Future Of TikTok Influencers
TikTok influencers would lose a valuable platform – and potentially paychecks – under the proposed ban.
So, what will happen to all the sponsorships and deals that these influencers have with certain brands? What if influencers have already agreed to post, say, 12 sponsored posts for a particular brand on their TikTok account over the next 12 months?
If TikTok were to be banned, the future of the relationships between influencers and brands would almost entirely be governed by the contract between them. This type of contract – known as an Influencer Agreement – normally sets out things like:
- Payment (whether the influencer will be paid per post or paid a fixed fee per month, etc.)
- Nature and duration of employment
If the influencer was already paid to do posts but TikTok was taken down shortly afterwards, the influencer might need to send the money back (but again, this depends on the contract).
Alternatively, influencers could move to another social media platform and continue to promote products there (meaning they wouldn’t necessarily need to send the money back).
We saw a similar thing happen a few years ago when Vine was discontinued—a lot of Vine influencers continued their work on YouTube, Instagram and, eventually, TikTok. This can be difficult, though, since influencers would need to maintain their following and brand on a completely different platform.
If the Influencer Agreement does not explicitly require the influencer to promote the items on TikTok, then the influencer can move to a different platform and still be entitled to payment.
Some contracts might not be as great, and the influencer could be terminated with no compensation. To avoid situations like these, it’s important to think ahead and consider Contract Amendment, which basically allows you to change the terms of your contract. This way, you can ensure that you still receive some form of compensation if TikTok is banned, or that your partnership with a brand continues on another platform.
TikTok was quick to respond to the news and had a number of arguments laid out in their recent statement. They argued that there had been ‘no due process or adherence to the law’. They added that this ban will not only eliminate an important online culture, but it interferes with the concept of ‘free expression and open markets.’ You can read TikTok’s official statement about the order here.
This recent news sparked a lot of controversy about the app itself and whether it actually is a threat, but it also invites some more general legal questions. For example, can the US government actually force the sale of TikTok?
Can A Government Force The Sale Of An Overseas Business?
In this situation, yes. Once the President declares a ‘national emergency’, a lot of the limits on his power can be altered if he thinks it’s necessary. Since the executive order declared the TikTok ban a ‘national emergency’, Trump does have the authority to force the sale of TikTok on the grounds of protecting national security.
In particular, the International Emergency Economic Powers Act (IEEPA) allows Trump to “regulate a variety of economic transactions following a declaration of national emergency”.
However, TikTok has made a number of arguments against this order which could possibly change the app’s future. They argued that:
- Trump’s actions were “unconstitutional” because TikTok was not given an opportunity to respond to the allegations
- They did not go through “standard legal processes”
- There was no evidence of such data being collected and given to the Chinese government
- In relation to TikTok employee rights, the order “violated the fifth and 14th amendments to the US Constitution, which state that no one shall be deprived of life, liberty or property without due process of law” commented Mike Godwin, a lawyer working with TikTok on the matter.
In their recent statement, TikTok commented “We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the US courts.”
What Is Happening In Australia?
If we shift our focus away from TikTok for a moment, we can see that the government can’t always use their powers to ban apps willy-nilly. Trump’s executive order was made out of concern for national security and what he declared to be a ‘national emergency’.
However, this isn’t the case here. In Australia, our Department of Home Affairs didn’t find TikTok to be a threat to our national security. After scrutinising the app’s privacy and data usage, Scott Morrison has stated “there’s nothing at this point that would suggest to us that security interests are being compromised, or Australian citizens are being compromised.”
This is a rapidly evolving situation, and one that will certainly have far-reaching implications on brands, influencers, multinational corporations, and international relations. With so many people worldwide using TikTok — and many relying upon it as a major source of income — the developments over the next few months are sure to get heated.
For Australian businesses or influencers who are reliant on TikTok for income, there doesn’t appear to be any huge cause for concern, as of yet. However, it’s always important to be prepared for what may happen. If you’re heavily reliant on TikTok as a source of income, it might be worth speaking with a lawyer to ensure you’re fully protected if something does happen to the app here.
In any case, we’ll be watching this news unfold over the next few months with great interest.
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