A US appeals court on Friday upheld plans for a ban on TikTok, on the grounds of insecure ownership and ties to the Chinese Communist Party. Meta enjoyed a 2% surge in shares following the announcement as it looks set to benefit from an influx of former TikTok users, of which there are currently 170 million, should the ban be enacted in 41 days’ time.
The Chinese-based ByteDance, which owns TikTok, has until 19 January to find new non-Chinese buyers, or else it will be banned from the US. While the latest ruling represents a crushing blow to TikTok, the company plans to appeal the decision in the Supreme Court.
For Meta, it is hard to imagine a better piece of news. If TikTok is banned nationwide, it will surely cement Meta’s position as the foremost social media company on the planet.
Federal Court Upholds TikTok Ruling
On Friday, a federal appeals court ruled in favor of the law that forces ByteDance to sell TikTok to a non-Chinese company or face a ban in the US. The ruling is just the latest twist in a long-running saga which dates back to December 2019, when US military personnel were instructed to delete TikTok from their mobile devices.
ByteDance now has 41 days to sell off its assets, or TikTok will be completely banned from the US. However, the company plans to appeal the decision in the Supreme Court.
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Expressing optimism, TikTok spokesperson Michael Hughes said: “The Supreme Court has an established historical record of protecting Americans’ right to free speech, and we expect that they will do just that on this important constitutional issue.”
Meta Waits in Wings as TikTok Cries “Free Speech”
TikTok hopes that by arguing Americans’ freedom of speech will be circumvented with the ban, it can overturn the historic ruling. TikTok spokesperson Michael Hughes continued: “The TikTok ban, unless stopped, will silence the voices of over 170 million Americans here in the US and around the world on January 19th, 2025.”
As the company prepares its arguments, Meta will be waiting in eager anticipation. ByteDance’s failure to divest its assets would see them benefit enormously. Launched in 2020, Instagram Reels was created specifically to rival TikTok. Since then, Meta has invested vast sums into honing its algorithm in order to keep pace with the Chinese-owned company.
The strategy would appear to be working. During its April earnings call, Meta confirmed that Reels accounts for 50% of its users’ time spent on the app. And on Friday, its share price leaped in response to the latest TikTok ruling.
Meta’s Domination Could Make Way for Super App
Whatever the outcome on January 19, Meta’s stock is the highest it has ever been. The company owns four of the ten biggest social media platforms in the world, with Facebook, Instagram, WhatsApp, and Facebook Messenger.
Plus, with a growing number of companies and individuals quitting X, the social media race has never looked so one-sided. Its market dominance all but assured, perhaps Mark Zuckerberg will next look to revive the long-mooted “super app” strategy.
Super apps are all-in-one platforms, which offer ecommerce, messenger, and social networking capabilities. They have taken Asia by storm, in the form of Alipay and WeChat for example, but have yet to find a foothold in the US market. Elon Musk and Zuckerberg have previously made no secret of their desire to emulate such strategies. As TikTok inches closer to departing the US market, Meta is in pole position to fill the vacuum – and potentially set its super app designs into motion.
