As US lawmakers consider a possible ban on TikTok, the ByteDance-owned short-form video app has launched economic impact report on Thursday. In it, the company touts that the platform generated $14.7 billion for small to medium-sized businesses (SMBs) last year and another $24.2 billion in overall economic activity, powered by small business use of TikTok.
In addition, it states that more than 7 million US businesses rely on TikTok and that 224,000 jobs were supported by small business activity on the platform in 2023. Of these, 98,000 jobs were directly supported by SMEs on TikTok. The states with the biggest impacts were California, Texas, Florida, New York and Illinois.
The study was carried out by economic forecasting group, Oxford Economics. She measured SMB activity on TikTok, along with ad spend and ROI, and leveraged census data and other metrics to reach her conclusions.
While a report of this size and scope could not have come together overnight, the timing of its release is likely no coincidence.
In March, a bill that could ban TikTok passed the House of Representatives. said President Biden he would sign it into law if it also passes the Senate. Worryingly for TikTok, the bill won bipartisan support, passing the House by a vote of 362-65, despite former President Trump’s shift on the issue. The Trump administration had previously sought to ban TikTok, calling it a national security risk, but Trump now opposes a bansaying that Meta will benefit.
Meta is clearly preparing for a possible future where TikTok could be banned, if not blocked by ByteDance. On Wednesday, Facebook was updated to support a new video player on its social network. It will suggest Reels, long videos, and live videos, but by default it will display them in vertical format, just like TikTok.
YouTube and other short-form video platforms could also gain increased exposure if TikTok were banned, and could also pave the way for startups competing in the space.
TikTok’s financial report is a clear attempt to argue why the app should be allowed to continue operating, noting that $5.3 billion in tax revenue last year was supported by small business activity on TikTok, including its marketing and advertising platform.
The company also presented a variety of case studies where business owners claim that TikTok has helped increase sales, website traffic and other forms of additional revenue.
Linking the ban to the app’s economic impact is a solid PR strategy — especially since a group of TikTok creators got a judge to successfully block Trump’s 2020 TikTok ban, saying it would affect their business opportunities , such as brand sponsorships and the ability to make an income.
Although TikTok is urging users via in-app messages to call Congress to protest the ban, the bill still faces a tougher road to passing the Senate — even more so now that the GOP leader has reversed his position on the ban.
