By Eric J. Savitz
TikTok might be banned by Congress, after all.
House Speaker Mike Johnson on Wednesday indicated he will package a group of bills that include funding for Israel and Ukraine, new Russian sanctions, and a forced sale of TikTok into a single bill, with a vote scheduled for this Saturday.
In March, the House passed a bipartisan measure that would force China's ByteDance to divest the popular short video service or face a ban in U.S. app stores. But that measure hasn't yet been taken up by the Senate, where sentiment is mixed.
Sen. Rand Paul (R., Ky.), for one, has objected the proposal could violate the First Amendment protection on free speech.
There are real constitutional issues with a potential ban. A federal court late last year blocked a Montana law intended to bar TikTok in that state, asserting the measure likely violates the First Amendment. An attempt by former President Donald Trump several years ago to ban TikTok using an executive order was blocked by a federal court.
TD Cowen Washington Research Group analyst Paul Gallant writes in a research note that if the measure is approved, it would then go to the Senate, which would need to accept or reject it as a whole, including the potential forced sale of TikTok.
Gallant notes that Johnson's goal "appears to be forcing the Senate to accept some things it dislikes in order to get what it wants." Even if the measure fails, Gallant now sees a 65% chance that a TikTok forced sale and potential ban becomes law this year.
Passage of the measure would be a positive for other companies in the short-video sector, in particular, Snap, Meta Platforms, and Alphabet's YouTube.
In Wednesday trading, Snap shares were 4.7% higher and Alphabet edged up 0.9%; Meta was off about 1%. The S&P 500 and Nasdaq Composite were down 0.6% and 1.2%, respectively.
Write to Eric J. Savitz at eric.savitz@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 17, 2024 17:57 ET (21:57 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments