Yesterday, U.S. senators from both parties introduced the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act. RESTRICT seeks to provide the Commerce Department with the power to ban foreign-linked hardware and software that is deemed to be a risk to national security.
In other words, RESTRICT would have the power to ban Chinese-owned TikTok. It just so happens that Vinco Ventures (NASDAQ:BBIG) subsidiary ZVV Media Partners owns an 80% ownership interest in Lomotif, which is a direct competitor to TikTok.
In response, TikTok fired back that the “U.S. ban on TikTok is a ban on the export of American culture and values to the billion-plus people who use our service worldwide.”
BBIG Stock: Vinco Looks to Capitalize on Potential TikTok Ban
Vinco released a press release following the announcement. It stated that the approval of the bill would influence President Joe Biden to take action against any entities that “knowingly transfer TikTok user data to any foreign person working in conjunction with the government of China in areas such as hacking, surveillance or information gathering involving the U.S.”
In other words, passage of the bill would require the Commerce Department to find clear evidence that TikTok is a national security threat. Meanwhile, the White House has already come out with its support for the bill.
In the past two years, TikTok has spent over $1.5 billion on data security measures. Additionally, it has remained adamant in its stance that U.S. user data is confidential. The company has also developed a security agreement with the Committee on Foreign Investment in the United States (CFIUS) that it seeks approval for.
Vinco also acknowledged that Lomotif is more than ready to “fill the void” if TikTok is banned. Like TikTok, the application is designed for short videos and includes vide0-editing features. At the same time, Lomotif will still have to compete with other popular short video providers, such as Meta Platforms’ (NASDAQ:META) Facebook reels.
Current usage data for Lomotif is unknown, as Vinco has kept hush on this information. Vinco’s last update was that the application had over 225 million installations in around 200 countries.
On the date of publication, Eddie Pan held a LONG position in META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
