The Clap
Snap and Meta’s shares rose in after-hours trading after reports that the Biden administration is considering banning TikTok in the U.S. unless ByteDance divests its stake.
What
Both Snap and Meta face stiff competition from TikTok and have introduced their own short-form video products to compete. The White House supports a Senate bill that would allow a TikTok ban in the U.S. due to concerns about national security.
So What
If a TikTok ban occurs, it could potentially benefit Snap and Meta by reducing competition for user attention. However, ByteDance has argued that divestment won’t solve national security issues, and the best way to address them is with transparent, U.S.-based protection of user data and systems.
Now What
The situation is still developing, and its impact on the social media industry remains to be seen.
