Small businesses and content creators will face a blow if TikTok shuts down this weekend after the Supreme Court on Friday upheld its decision. This application is prohibited by law Unless it is sold by its Chinese parent company.
Mississippi Candle Company founder Jessica Simon said Friday she was "saddened" to expect a sharp drop in sales if TikTok is banned from U.S. app stores as early as Sunday. She said 90% to 98% of her company's sales come directly or indirectly from TikTok.
"The majority of our business comes from people seeing our products on TikTok and purchasing through our TikTok store, or visiting our website," Simon told CBS MoneyWatch. "I'm still processing the news."
Simone, who first started making candles on her stovetop, said the TikTok store she opened in 2023 "changed our lives."
Despite these concerns, China's top court declined to block or delay a potential ban if TikTok's Chinese owner ByteDance fails to divest the platform. The Justice Department, which supports the law, applauded the ruling.
"The court's ruling enables the Department of Justice to stop the Chinese government from weaponizing TikTok to undermine U.S. national security," Attorney General Merrick Garland said in a statement. "A dictatorial regime should not have unfettered access to millions of dollars Americans’ Sensitive Data.”
Jeffrey Fisher, an attorney representing TikTok content creators in a Supreme Court case against the app, urged President Joe Biden and Attorney General Merrick Garland in a letter Friday ) delayed implementation of the law.
"The law is scheduled to take effect on the eve of the inauguration of President-elect Trump, who recently petitioned the Supreme Court for the same relief because he wants to address the issue head on," Fisher wrote. "He deserves the opportunity. Otherwise, The bill would impose a heavy burden on the speech rights of more than 170 million Americans and cause substantial and avoidable interference with third-party providers, who could be subject to severe penalties if they continue to provide TikTok to users. Millions of users.”
and 170 million monthly active usersTikTok is an important revenue-generating tool for millions of small businesses. For Simon, her company's presence on the platform generated enough sales that she was able to build a 2,100-square-foot warehouse and hire a team of employees to help produce the company's products. Mississippi Candle sales topped six figures for the first time in November and December, she told CBS MoneyWatch.
"My heart breaks for my staff," she said. “I can’t make up that kind of traffic or sales anywhere else,” she said. Simon's company has 50,000 followers on TikTok, 7,700 followers on Facebook and 3,100 followers on Instagram.
"So we won't be able to make up that revenue. We will have to completely rebuild our community elsewhere, which will take longer than TikTok," Simon added.
Morgan Stanley analysts said Facebook and Instagram owner Meta would benefit from TikTok users migrating to other platforms, writing that the roughly 32 billion hours U.S. consumers spend on TikTok each year may soon be scramble.
"Given Meta's already leading user base, data set and distribution, it remains the biggest fundamental winner from any TikTok ban," analysts said in a research note. Alphabet-owned YouTube could also benefit as it also allows users to create Short film.
Still, experts say none of these apps can match TikTok in its ability to generate revenue for brands, advertisers and creators.
"A lot of people have flocked to other apps, but that's going to cause a lot of damage and lost revenue," Edward Klaris, managing partner at Klaris Law, told CBS MoneyWatch. "They have to find alternatives. expression, and this ban reduces their presence on an already established platform.”
Possible losses from the shutdown of TikTok's U.S. operations include independent content creators, businesses and advertisers. For companies, TikTok allows them to build accounts that reach users organically as well as paid advertising. Popular influencers can earn handsome incomes from brands paying them to peddle their products.
"Advertisers are delivering their messages through business speaking engagements, influencers are doing business speaking engagements, and businesses are sharing their messaging. So, there's a lot of spending going on," Claris explained.
He agreed that the ban Competitors like RedNoteanother Chinese-owned app.
Jessica Rauchberg, an assistant professor of communications technology at Seton Hall University, said the impact of shutting down TikTok in the U.S. will have a broad impact on different users.
“It really worries me about everyday creators, especially marginalized creators who may have disabilities that prevent them from working in person,” she said. "TikTok is a great space for users to supplement their income through content creation, and when you lose that, where do you go? You can't just rebuild on another platform."
Rauchberg added: “It’s a great way to reach customers because a lot of young people use it as a search engine and a place to find great local restaurants or artisans who are making something special that you can’t find at Target or Walmart. merchandise." "It's going to hurt consumers, and it's an important outreach tool for small businesses. That's why they're scared."