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The US Congress is expected to vote on a new version of the TikTok divestment or ban bill as early as this evening.
House Speaker Mike Johnson (R-La.) plans to include the TikTok bill in a fast-track package that includes billions in aid for Ukraine, Israel and Taiwan. The combined measures will move under a single procedural rule, allowing for an editing process.
Johnson said he expects the vote on final approval of these bills to take place Saturday evening, according to a CBS report.
TikTok is owned by Chinese tech giant ByteDance (BDNCE). The proposed law requires TikTok to divest from ByteDance or face a ban in the United States
Last month, the U.S. House of Representatives voted overwhelmingly in support of the divestment or ban bill, but it looked like the new law might bog down in the U.S. Senate.
The latest bill extends the divestment timeline to 270 days from 180 days in the bill passed last month. It also allows US President Joe Biden to extend the deadline by another 90 days. The longer timetable alleviates some concerns expressed in the Senate.
Biden has said he will sign legislation on TikTok.
The CEO of Tesla (TSLA) and owner of social media platform đť•Ź weighed in on the debate on Friday.
“In my opinion TikTok should not be banned in the US, although such a ban would benefit the platform đť•Ź,” Musk published. “To do so would be against free speech and expression. That’s not what America stands for.”
“It should be owned by American businesses,” former Treasury Secretary Steve Mnuchin said last month. “There is no way the Chinese would ever allow an American company to own something like this in China.”
Social media rivals stand to benefit from the ban
If the TikTok bill becomes law, Meta Platforms (META), Google (GOOG) (GOOGL), and to a lesser extent Snapchat (SNAP) could stand to gain more.
While time spent on TikTok per average daily user has declined over the past year, it still outpaces its rivals.
For example, Sensor Tower data shows a 4% year-over-year decline for TikTok in this category for the first quarter of 2024. Even with that decline, the average TikTok user still spends about 80 minutes a day on the platform. video shorts. .
Meanwhile, the average daily user on Meta’s Facebook and Instagram spent 60 minutes and 45 minutes, respectively. This is even with Google’s Facebook and YouTube seeing user minutes per day increase by 3% and 1% over the same time period.
The success of Meta’s Reels and YouTube Shorts is likely responsible for the slight decline in average daily usage of TikTok over the past year.
“We believe Meta is benefiting from sustained traffic to Reels on Instagram and Facebook and increased ad load across its family of apps,” said Youssef Squali of Truist Securities.
A survey by TD Cowen found that if TikTok were banned, 28% of TikTok users would shift their time to Reels, while 22% would shift their time to YouTube Shorts.
Former US Congressman Ryan Costello doubts ByteDance will divest from TikTok.
“Although the United States has never found any evidence that TikTok poses a threat to US national security, it has never stopped persecuting it,” said Wang Wenbin, a spokesman for China’s Ministry of Foreign Affairs. “This will inevitably backfire on the United States itself.”