#SocialStocks: U.S. lawmakers draft legislation to push TikTok divestiture

Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

WINDING DOWN: In a regulatory filing, Entravision (EVC) stated: “On March 4, 2024, the company received a communication from Meta Platforms (META) that it intends to wind down its authorized sales partner program globally and end its relationship with all of its ASPs, including the company, by July 1. For full year 2023, Meta’s ASP program represented $586.4M of the company’s $1.1B of total consolidated revenue. The company has initiated a review of its operating strategy and cost structure and will provide an update on associated plans as soon as practicable.”

FORCING THEIR HAND: Representative Mike Gallagher, the chair of the House select China committee and Representative Raja Krishnamoorthi, are introducing legislation joined by more than a dozen other lawmakers that would give China’s ByteDance about six months to divest popular short video app TikTok or face a U.S. ban, congressional aides are quoted by Reuters as having said. “This is my message to TikTok: break up with the Chinese Communist Party or lose access to your American users,” Gallagher said. “America’s foremost adversary has no business controlling a dominant media platform in the United States.” The proposed legislation grants ByteDance a 165-day window to divest TikTok, a platform utilized by over 170M Americans. Failure to comply within this timeframe would render it illegal for app stores, such as Apple (AAPL), opens new tab, Google opens new tab, and others, to offer TikTok or provide web hosting services to ByteDance-controlled apps. It’s important to note that the bill does not authorize any enforcement actions against individual users of an impacted app. “This bill is an outright ban of TikTok, no matter how much the authors try to disguise it,” a company spokesperson said on Tuesday.

ON HIGH ALERT: Meta said in an update on its status page on Tuesday: “We are aware of an issue impacting Facebook Login. Our engineering teams are actively looking to resolve the issue as quickly as possible.” White House officials were monitoring the outages at Meta’s Facebook and Instagram but said they didn’t see specific or credible threats attempting to disrupt Super Tuesday’s elections, The Wall Street Journal’s Joseph De Avila reported. Hundreds of thousands of users around the world have reported outages, according to Downdetector. “We’re aware people are having trouble accessing our services,” Andy Stone, a Meta spokesman, said on X. “We are working on this now.” “We are aware of the incident and at this time we are not aware of any specific election nexus or any specific malicious cyber activity,” a senior Cybersecurity and Infrastructure Security Agency official said during a press call.

EDIT BUTTON: Instagram is now allowing direct message edits within a 15 minute window. “…we are excited to announce a number of new DM features to help you better connect with friends, making your messaging experience more flexible and enjoyable. People connect daily on Instagram through posts and stories, but especially privately through messaging, so we’re excited to be bringing these new messaging features to Instagram. Whether it’s a typo or something just doesn’t sound right, you can now edit messages up to 15 minutes after sending…To make a change, press and hold on the sent message, then choose “edit” from the dropdown menu…For chats you have with your best friends or family, or simply ones you want at the top of your inbox, soon you’ll be able to pin up to 3 group or 1:1 chats for easy access…We are always working to make messaging on Instagram a fun and private way for people to connect with each other. Stay tuned for more features coming soon.”

THANKS, BUT NO THANKS: In a meeting late last year between staffers from Google (GOOGL) and Meta Platforms, Google suggested that Meta partner on Android XR, the new software platform Google is developing for virtual and augmented reality headsets, but Meta rebuffed Google’s proposal, a person involved in the talks told The Information’s Sylvia Varnham O’Regan.

AUSTRALIA SEEKS REGULATORY AID: Australia’s government on Friday criticized Meta after the company pulled out of an agreement to pay local media companies for content, The Financial Times’ Nic Fildes wrote. Michelle Rowland, communications minister, said that Meta’s move represents a “dereliction of its commitment to the sustainability of Australian news media” and that her department will seek advice from the competition regulator and Treasury over the next moves, Fildes noted.