During a Senate hearing on Wednesday, frustrated Senator Thom Tillis, R-N.C., warned top social media company leaders, including Meta CEO Mark Zuckerberg and TikTok CEO Shou Zi Chew, that they could be regulated out of business if they continue to fail in protecting children from sexual exploitation on their respective platforms. The hearing, held before the Senate Judiciary Committee, was filled with raw emotion as parents, whose children have been targeted by online predators, expressed their concerns.

In spite of the emotional climate, it was evident that Wall Street didn’t anticipate any significant financial impact on Meta and Snap. Both companies’ shares remained relatively unchanged during after-hours trading on Wednesday, reflecting a lack of immediate regulation.

Despite political differences, both Republican and Democratic senators agreed that social media firms are failing the American public, particularly young people. While passing legislation takes time, the recent Senate hearing has energized child-safety and anti-big tech advocates, who are hopeful that proposed bills like the Stop CSAM Act and the Kids Online Safety Act (KOSA) will lead to necessary regulations.

However, lawmakers have struggled to pass legislation in the past concerning issues like antitrust and data privacy. Senator Tillis warned the tech CEOs that without internal motivation to address these concerns, Congress may intervene and potentially harm their businesses.

Tillis also cautioned against over-regulation, highlighting concerns that excessive regulation could benefit foreign companies and enable predators to find alternative ways to exploit children.

Meta was the center of attention during the hearing due to its large user base, high-profile data privacy issues, and ongoing legal challenges. New Mexico’s attorney general recently filed a lawsuit against the company, accusing it of inadequately protecting young users from sexual predators. The potential penalties from these lawsuits could have significant financial implications for Meta, as demonstrated by the $725 million settlement it paid for the Cambridge Analytica scandal.

Despite these challenges, Meta’s business has been recovering, aided by its advertising efforts and its partnerships with Chinese retailers, rumored to include companies like Temu and Shein. Some lawmakers have criticized these Chinese companies for benefiting from certain trade rules.

Lawmakers also expressed concerns about Chinese influence on social media platforms, directing questions about TikTok’s Chinese owner, ByteDance, to CEO Shou Zi Chew. Senator Tom Cotton, R-Ark., specifically questioned Chew about his potential involvement with the Chinese Communist Party.