The TikTok ban was voted on by Congress and signed by President Biden. The Chinese company took the case to the federal court system. It has worked its way to the Supreme Court, and a decision is imminent. The Trump Administration, which will become official on January 20, recently urged the court to give it time to “seek a negotiated resolution” between the government and TikTok. It commented that the ban raised “sweeping and troubling” challenges to free speech. The most likely winner of the ban was Meta Solutions’ (NASDAQ: META) Instagram. That “win” becomes less likely.
The TikTok ban was based on the idea that it is a national security risk and a way for China-based parent ByteDance to gather information on Americans. This information would be given to the Chinese government. During the debate about TikTok’s future, Congressman Cathy McMorris Rodgers said, “Today, the CCP’s [Chinese Communist Party’s] laws require Chinese companies like ByteDance to spy on their behalf.”
According to some estimates, the list of TikTok competitors are Instagram, Snapchat, and X. TikTok has a US user base of 170 million. Instagram has 140 million. The two also compete outside the US. According to The Media Lab, “As TikTok and Instagram vie for supremacy, the competition between the two platforms has intensified. TikTok’s algorithm-driven content discovery and engagement have reshaped the social media landscape, challenging Instagram’s long-standing dominance.” A great deal of money is at stake. TikTok’s US ad revenue is expected to be over $10 billion this year.
TikTok could get a reprieve in the US. ByteDance has the option to sell it to an American company. So far, ByteDance has turned that option down. If a full ban goes into effect, the $10 billion a year TikTok ad base is up for grabs. If that happens, one big winner would be Instagram.
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