A US government-mandated sale or ban of Tiktok in the US could be a boon for Mark Zuckerberg and Meta.
Instagram Reels could get a boost, experts say.
Zuckerberg has long warned that his company faces “unprecedented” competition from Tiktok.
Mark Zuckerberg and Meta are likely to be quietly rejoicing at the news that the US government is once again threatening to ban Tiktok.
On Wednesday, Tiktok owner Bytedance confirmed that the Biden government had given the Chinese social media company an ultimatum: either sell shares in Tiktok or face a US ban on the app. A spokesman for Tiktok stated that selling the app would not meet national security concerns. However, according to a Bloomberg report, the company’s leadership is still discussing the possibility of a sale.
It’s not the first time U.S. politicians have threatened to ban the app, but the Biden administration’s rhetoric on the issue has seemingly “intensified,” Wedbush tech analyst Dan Ives tells Business Insider. However, Ives estimates the likelihood of a fork or shutdown to be under 50 percent, as Biden’s move could face similar legal problems as the Trump administration will in 2020.
Early Christmas present
Meta boss Zuckerberg has a lot to gain from a Tiktok ban. That would be like an early Christmas present for Meta, which is looking to boost business for its Instagram Reels service. Meta’s shares rose about three percent after the announcement.
“Any bad news or additional scrutiny for Tiktok is a clearly positive sign for Zuckerberg and Facebook,” Ives said.
Even before US politicians publicly threatened to ban Tiktok, Zuckerberg was fueling Washington’s fears over Tiktok, according to a 2020 Wall Street Journal report. At a White House dinner, he said Chinese companies should be more tightly controlled than Facebook. Recently, The Washington Post reported that Meta had paid a pro-Republican consulting firm to launch an anti-Tiktok campaign.
At the time, a meta spokesperson defended the effort. “We believe all platforms, including Tiktok, should be subject to a scrutiny commensurate with their growing success,” the spokesperson said.
Tiktok more popular than Instagram Reels
Tiktok has been a thorn in Facebook’s side for a long time. Last year, Zuckerberg warned employees that the video-sharing app faced unprecedented competition.
Tiktok quickly became one of the most popular social media platforms in the US. There are more than a billion active monthly users worldwide. The app is particularly attracting the attention of younger generations — a demographic that Facebook and Instagram are struggling to reach, according to a 2022 Pew Research Center study.
In recent years, Zuckerberg has attempted to respond to Tiktok’s popularity with Instagram Reels, even rolling out a controversial redesign that pushed more reel videos into users’ feeds. The billionaire has stated that the company will continue to rely on reels as a growth driver.
But Instagram doesn’t have TikTok’s secret recipe, an algorithm that keeps users engaged. Last year, The Wall Street Journal reported that Instagram users spend 17.6 million hours a day on Reels, while users on Tiktok spend a staggering 197.8 million hours a day.
Tiktok CEO addresses Congress on March 23
Social media expert Matt Navarra told Insider that Meta’s algorithm is still in the early stages of learning. However, any disruption to Tiktok could give the company some time to catch up.
“The time spent on Tiktok has to go somewhere,” Navarra said. “It’s safe to assume that these companies, which have created some sort of clone of the app, will absorb at least some of that time.”
In the short term, app applications such as Instagram Reels and YouTube Shorts could also experience an upswing. Navarra said that in the face of a possible ban, social media creators will likely look to further diversify the social media pages they use.
Tiktok CEO Shou Zi Chew is scheduled to testify before Congress on March 23 about the company’s ties with China, as well as the app’s handling of user data and child safety issues. Meta and Tiktok spokespeople have not responded to a request from Business Insider.
Even if Tiktok were to split from ByteDance or agree to a sale, it could be a win for Zuckerberg. As the company explored the prospect of a sale in 2020, Bytedance said the sale would not include TikTok’s algorithm, according to a report by the South China Morning Post.
This text has been translated from English. You can find the original here.