The Supreme Court on Wednesday said it will hear a challenge from TikTok parent ByteDance to a law that could ban the popular short-video app in the U.S. Oral arguments are set for early next month. The legal showdown is sure to have implications for Meta Platforms and other social media stocks, along with tech giants like Oracle.
The Supreme Court scheduled oral arguments for Jan. 10, ahead of the Jan. 19 date the law would take effect. Signed by President Joe Biden in the spring, the law requires China-based ByteDance to sell TikTok's U.S. operations to another company. If it doesn't, the app will be banned.
A federal appeals court upheld the law earlier this month, prompting TikTok to bring to the Supreme Court a challenge to the law's constitutionality. The scheduled hearing from the Supreme Court puts the case on an "exceptionally fast track," as described the New York Times.
Lawmakers cited national security risks when it passed the law earlier this year. They argue that private companies in China could still face pressure to share user data with the Chinese government.
TikTok, meanwhile, has pushed back on those claims and argues the potential ban represents "unprecedented censorship" for the more than 170 million Americans who use the app.
Meta Stock In Focus
One stock to watch with as TikTok heads for the Supreme Court is Meta Platforms. TikTok is a formidable competitor to Meta's Facebook and Instagram. Analysts project that time spent on TikTok could shift to the Reels short-video product hosted on Facebook and Instagram, if TikTok is banned.
Meta stock was trading higher following the Supreme Court announcement but closed down by 3.6% at 597.19. Stocks slid overall Wednesday afternoon after the Federal Reserve signaled fewer rate cuts.
Another beneficiary of that time spent could be YouTube, which is part of the Google parent company Alphabet. Google stock closed at 188.40, down 3.6% on the day.
Snapchat is also seen by analysts as another potential winner if TikTok is banned. Shares of Snapchat parent Snap closed a fraction higher at 11.22 Wednesday.
Oracle stock, which hosts TikTok's U.S. data and counts the company as a major cloud customer, was higher initially following the Supreme Cout news but also slumped in the afternoon. Shares closed at 165.41, a 2.5% drop.
