Important points
- The US House of Representatives has passed a bill that would force China's ByteDance to sell TikTok or face a ban on the social media app in the US, affecting its 170 million users.
- Lawmakers said the app could pose a national security threat due to its ties to TikTok's Chinese parent company ByteDance, citing concerns that the Chinese government could request data sharing. listed.
- The US government had previously moved to ban the app in 2023, but there was not enough support to pass the law.
- CFRA analysts said that Snap, Meta and Google's parent company Alphabet could benefit from a national ban on TikTok, but the company said that “given the app's popularity, this bill would not be effective in a presidential election year.” There are doubts that it will receive sufficient support from the Democratic Party.”
The US House of Representatives on Wednesday passed a bill that would force the company to sell TikTok to China's ByteDance or face a ban on the social media app in the US, affecting its 170 million users.
The Protecting Americans from Applications Controlled by Foreign Adversaries Act “prohibits the distribution, maintenance, or provision of Internet hosting services for applications controlled by foreign adversaries, such as TikTok.”
The bill was introduced by House Republicans, citing concerns that the app could pose a national security threat due to its ties to TikTok's Chinese parent company, ByteDance, and that the Chinese government could request data sharing. was cited as the reason. The bill passes with bipartisan support and will now be sent to the Senate.
The regulation could also apply to other social media companies that are “controlled by a foreign adversary.” [have] “determined by the President to pose a significant threat to national security,” but is currently targeting only ByteDance and TikTok by name.
The US government had previously moved to ban the app in 2023, but failed to gain the support needed to pass the bill. This app has been banned on some government devices.
There are more than 170 million TikTok users in the United States affected by the ban. The platform is especially popular among young people, with more than half (56%) of U.S. adults ages 18 to 34 using the app, according to a Pew Research study.
TikTok uses the platform's algorithms to show users personalized content on their “For You” pages. All accounts “contained basic account metadata, regardless of privacy settings,” Pew Research reported.
JPMorgan researchers found that the app had a wide range of content, including users sharing their opinions on political and economic issues, which could influence the upcoming US presidential election. .
Analysts said, “The economy remains the biggest issue that drives voters in both parties, and partisanship shapes economic perceptions,'' adding, “The disconnect between strong fundamentals and poor consumer sentiment is a key factor for the Biden administration.'' “It's a big focus,” he added. They are concerned that this sentiment reflects opinions from social media apps such as TikTok. ”
Analysts said a nationwide ban on TikTok could benefit Snap (SNAP), Meta (META) and Google parent Alphabet (GOOGL).
CFRA analyst Angelo Gino wrote that if the bill passes, “SNAP would be the way to play,” adding, “Most U.S.-based short-form video services (SNAP, META's Reels, GOOGL's) engagement levels may improve.” YouTube Business, in that order).
Analysts said the company had “questions whether the bill would have enough support from Democrats in a presidential election year, given the app's popularity.”
