Meta Platforms, the parent company of Facebook, saw its stock reach a record high on Friday following a U.S. appeals court ruling that supports a law requiring ByteDance, the China-based owner of TikTok, to divest from the app by early next year or face a potential ban. The decision marks a significant win for Meta while dealing a blow to ByteDance’s hold on the U.S. market.
The law, upheld by the appeals court, was passed with bipartisan backing in Congress and signed by President Joe Biden. It grants the U.S. government extensive powers to restrict or ban foreign-owned applications that pose potential risks related to the collection and security of Americans’ data. This legal framework reflects growing concerns about foreign influence and data privacy issues.
ByteDance had challenged the law, arguing it violates constitutional protections, including Americans’ free speech rights. The company contended that the divestment requirement and potential ban unfairly target TikTok, which boasts 170 million active users in the U.S., and sets a dangerous precedent for technology regulation. However, the court rejected these claims, affirming the government’s authority to take action in matters of national security and data privacy.
The ruling intensifies pressure on ByteDance to comply with the divestment order or risk losing access to one of its largest user bases. It also comes amid ongoing geopolitical tensions between the U.S. and China, with the decision signaling a tougher stance on foreign-owned tech companies operating within American borders. TikTok’s future in the U.S. now hangs in the balance, as the company evaluates its legal and strategic options.
Meanwhile, Meta Platforms has emerged as a beneficiary of the legal challenges faced by TikTok. As one of TikTok’s chief competitors, Meta stands to gain from any disruption to TikTok’s dominance in the short-video app market. Investors responded positively to the court ruling, propelling Meta’s stock to record highs and reinforcing its position as a key player in the evolving social media landscape
