Meta Platforms (META) shares extended gains Tuesday, alongside a big move higher for messaging app maker Snap (SNAP), after Republican Senator Marco Rubio unveiled a bi-partisan bill that would ban TikTok from operating in the United States.
TikTok, the world's fastest-growing social media app with around 755 million users -- around 80 million of which are based in the United States is owned by China-based tech group ByteDance Ltd. Senator Rubio said the group is required by law to make its data available to the Chinese Communist Party, allowing for the app to be potentially used to spy on American citizens.
Senator Rubio's bill, the ‘‘Averting the National 5 Threat of Internet Surveillance, Oppressive Censorship and Influence, and Algorithmic Learning by the Chinese Communist Party Act’’, would "block and prohibit" social media companies that are "under the influence of, China, Russia, and several other foreign countries of concern" from operating in the United Sates
U.S. Representatives Mike Gallagher, a Republican from Wisconsin, alongside Illinois Democrat Raja Krishnamoorthi, will bring a companion bill to the House of Representatives.
“The federal government has yet to take a single meaningful action to protect American users from the threat of TikTok. This isn’t about creative videos — this is about an app that is collecting data on tens of millions of American children and adults every day," Senator Rubio said. "We know it’s used to manipulate feeds and influence elections. We know it answers to the People’s Republic of China. There is no more time to waste on meaningless negotiations with a CCP-puppet company. It is time to ban Beijing-controlled TikTok for good.”
Meta shares were marked 5.2% higher in late-morning trading following news of the Rubio bill to change hands at $120.66 each. Snap shares, meanwhile, rose 2.4% to $9.68 each.
"TikTok is digital fentanyl that’s addicting Americans, collecting troves of their data, and censoring their news," Congressman Gallagher said. "It’s also an increasingly powerful media company that’s owned by ByteDance, which ultimately reports to the Chinese Communist Party – America’s foremost adversary."
