Congress is voting on a TikTok ban. Chinese parent ByteDance has been accused of using the app to spy on Americans and their habits. ByteDance will sue, and the ban may only take effect well into the future if it loses that suit. TikTok has at least 170 million users in the United States. If it is pushed out of the market, the biggest winner is Meta Platforms Inc.(NASDAQ: META), parent of Facebook and Instagram. The latter is often viewed as TikTok’s primary rival.
Instagram has 1.2 billion active users, but not all are in the United States. How Instagram and TikTok measure users may differ, so a straight comparison may be difficult. According to the Financial Times, a probably accurate number is that TikTok’s U.S. revenue is $16 billion. Meta’s total revenue last year was $135 billion, so the TikTok U.S. revenue would be more than a trivial addition. Even if TikTok disappeared in the United States tomorrow, some of that money would go to other rivals. However, Meta would almost certainly be a significant beneficiary. (See the fastest-growing brands in each state this year.)
The federal government has successfully banned Chinese products in the recent past. It blocked the sales of many Huawei Technologies and ZTE products. The U.S. Federal Communications Commission called them an “unacceptable risk.” That decision did not go through Congress but damaged these companies nonetheless. At one point, Huawei said the U.S. action cut its revenue by 29%.
TikTok faces an existential crisis in America. And Meta, an American company, may benefit.
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