By: Scott Chimuk
Effective January 19, 2024 the US Supreme Court banned TikTok – the extremely popular social media app that many businesses rely on as one of their primary sources of advertising and marketing. As a result, TikTok was banned on January 19th only to be briefly revived as of Monday, January 20th. The entire ordeal is a total legal fiasco.
The TikTok decision emphasizes the necessity of businesses ensuring that they have a robust legal strategy in place to pro-actively manage and rapidly respond to changing regulatory landscapes. In other words, this decision has business ramifications beyond preventing you from making videos doing dance moves while lip-synching to “Tay Tay” like the truly dedicated Swiftie that you really are. On a serious note, we will note legal pitfalls that this decision raises and how to avoid them.
The TikTok decision raises the importance of ensuring regulatory compliance - not only of your own company but of critical third-party infrastructure that your company relies on. For example, any company that was heavily reliant on TikTok for a significant part of its marketing may now find themselves in an extremely problematic situation. Additionally, a review should be conducted of any critical infrastructure aspects within your business to identify and flag potential regulatory compliance issues. This review does not need to be exhaustive or prohibitively costly. Pro-active compliance and legal risk identification is almost always much more costs effective in the medium and long term than reacting to issues as they arise.
The TikTok decision also raises issues that surround paradigm shifts in key aspects of your business. “Disruption” is a popular term in the tech sector and businesses will often look to capitalize on “disruptive” technology. When attempting to do so it is important to review the potentially unintended legal and regulatory consequences of such a change. For example, if a business intends on using digital note taking technology this could raise issues around how that information is stored, privacy concerns, and other concerns if information gathered in the notes is proprietary or otherwise sensitive. This is not a warning against innovation but rather an issue of ensuring reasonable and appropriate due diligence in order to facilitate the ability to rapidly respond to changing regulatory landscapes.
In conclusion, the US Supreme Court’s TikTok decision and the ensuing legal fiasco, should serve as an important reminder for businesses to pro-actively ensure regulatory compliance of critical infrastructure aspects of their business and to ensure that appropriate due diligence is conducted when adopting disruptive technologies – and for the record, no one is going to miss the opportunity to watch this author dance to Taylor Swift.
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