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The U.S. Congress is expected to vote on a new version of the TikTok divest-or-ban bill as soon as tonight.
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 one procedural rule, allowing for an amendment process.
Johnson said he expects the vote on the final passage of these bills to be on Saturday evening, according to a report by CBS.
TikTok is owned by the Chinese tech giant ByteDance (BDNCE). The proposed law reads that TikTok must divest from ByteDance or face a ban in the U.S.
Last month, the U.S. House of Representatives voted in overwhelming support of the divest-or-ban bill, but it appeared the new law might get mired in the U.S. Senate.
The latest bill extends the divestiture timeline to 270 days from the 180 days in the bill passed last month. It also allows U.S. President Joe Biden to extend the deadline by another 90 days. The longer timeline alleviates some concerns voiced in the Senate.
Biden has said he will sign the TikTok legislation.
Tesla (TSLA) CEO and owner of the social media platform 𝕏 weighed in on the debate Friday.
“In my opinion, TikTok should not be banned in the USA, even though such a ban may benefit the 𝕏 platform,” Musk posted. “Doing so would be contrary to freedom of speech and expression. It is not what America stands for.”
“This should be owned by U.S. businesses,” said former Treasury Secretary Steve Mnuchin last month. “There’s no way that the Chinese would ever let a U.S. company own something like this in China.”
Social media rivals stand to benefit from ban
If the TikTok bill becomes law, Meta Platforms (META), Google (GOOG)(GOOGL) and to a lesser extent Snapchat (SNAP) stand to gain the most.
Although time spent on TikTok per daily average user has declined over the past year, it still surpasses its rivals.
For example, data from Sensor Tower 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 spent about 80 minutes per day on the video shorts platform.
Meanwhile, the average daily user on Meta’s Facebook and Instagram spent 60 minutes and 45 minutes, respectively. This is even with Facebook and Google’s YouTube seeing user minutes per day increase by 3% and 1% over the same time frame.
The success of Meta’s Reels and YouTube’s Shorts are likely responsible for TikTok’s average daily use dipping slightly over the past year.
“We believe Meta is benefiting from sustained traffic to Reels on Instagram and Facebook and higher ad loads across its family of apps,” said Truist Securities’ Youssef Squali.
A survey by TD Cowen found that if TikTok was banned, 28% of TikTok users would shift their time to Reels, while 22% would shift to YouTube Shorts.
Former U.S. Congressman Ryan Costello doubts ByteDance would divest from TikTok.
“Though the U.S. has never found any evidence of TikTok posing a threat to U.S. national security, it has never stopped going after TikTok,” said Wang Wenbin, spokesman for China’s Ministry of Foreign Affairs. “This will inevitably come back to backfire on the United States itself.”
