Politics

TikTok chief says Trump’s threats are crushing the app — before a ban even begins

In a new legal filing, Vanessa Pappas, TikTok's interim head, lays out exactly how the threat of a ban is hurting the company's advertising, its workforce and its bottom line.

TikTok chief says Trump’s threats are crushing the app — before a ban even begins

TikTok is already feeling the pain from the Trump administration's ongoing threats.

Image: Nikolas Kokovlis/NurPhoto via Getty Images

TikTok may not be banned from the United States yet, but it says the Trump administration's continued threats have already had a devastating impact on the company's ability to land advertisers, hire new talent and hold on to content creators.

In a new court filing, TikTok's interim head, Vanessa Pappas, shared concrete data about the losses TikTok has experienced over the last few months, hoping to persuade the court to issue an injunction against the Commerce Department's forthcoming ban, which is set to take effect on Sept. 27.

According to Pappas, when Secretary of State Mike Pompeo first announced that President Trump was considering banning TikTok in the United States, the app's user base fell by 500,000 daily active users. In the month of August, after President Trump issued his executive order barring transactions with TikTok's parent company, ByteDance, TikTok lost $10 million in revenue, as a dozen brands canceled or delayed their advertising plans. That includes "some of the largest consumer goods companies in the United States," Pappas wrote.

The threats have also interrupted TikTok's hiring spree, according to Pappas. "Since July 1, 2020, 52 candidates have declined offers of employment with ByteDance and TikTok Inc. specifically due to the perceived uncertainty caused by the government's investigation of and threats against TikTok," Pappas wrote, not mentioning that TikTok's former CEO, Kevin Mayer, quit among the chaos and confusion after only a few months on the job.

TikTok has also watched its most popular creators get poached by other platforms. Pappas pointed specifically to TikTok's biggest star, Charli D'Amelio, who recently signed with Triller, a competing app. "Because of the halo effect associated with major personalities on the TikTok app, the departure of even one top creator can lead thousands of members of their fan base to the next platform as well," Pappas wrote.

According to Pappas, until July 1, TikTok was adding around 424,000 new daily U.S. users every day. Even a temporary ban could demolish that growth, according to TikTok's models, which estimate that 40% to 50% of TikTok's daily active users wouldn't return to the app even if the ban lasts only two months. "If the ban is in place for six months, 80 to 90% of daily active users will not return," Pappas wrote. Those estimates are based on what TikTok saw in India when the app was banned for two weeks in 2019.

And because U.S. content creators are so popular in other countries, Pappas argues that "banning TikTok in the United States will result in a massive decrease in content available globally, which will decrease business and impact both our new users and core user base worldwide."

For TikTok, the purpose of releasing these painful stats is to convince the court that it's suffering real harm as a result of the Trump administration's actions. Earlier this week, a district court blocked the Commerce Department's ban of WeChat. Now, TikTok is seeking the same.

Last weekend, the Commerce Department delayed its ban on new TikTok downloads from U.S. app stores, citing "recent positive developments" — namely, the fact that President Trump signaled his approval of a deal that would have given Oracle and Walmart minority stakes in the company and would have given Oracle control of U.S. user data.

But the president and the companies involved have since cast doubt on that deal. On Monday, during an interview with "Fox & Friends," the president claimed that Oracle and Walmart would control the new company, TikTok Global. "And if we find that they don't have total control, then we're not going to approve the deal," he said. Meanwhile, TikTok and Oracle have given their own mixed signals, contradicting each other's statements on the future company's ownership structure.

TikTok has until mid-November to work out the specifics of the deal before the Commerce Department cuts the company off from crucial services like internet hosting in the U.S. But Pappas' court filing makes clear that even if a deal is reached, whoever ends up owning TikTok in the end will be inheriting a once ascendant company that's already lost a lot.

TikTok vs Trump filing.pdf

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep Reading Show less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep Reading Show less
FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep Reading Show less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep Reading Show less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep Reading Show less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories
Bulletins