Social media app TikTok has been one of the biggest winners of the shelter-in-place environment in 2019. However, a recent push to ban TikTok in the United States due to security concerns may be great news for social media competitors Facebook, Inc. FB and Alphabet, Inc GOOG GOOGL.
What’s Wrong With TikTok? CNN recently reported TikTok was downloaded 351 million times in the first three months of 2020, more downloads than any other app in a single quarter in history. However, TikTok and its Chinese parent company ByteDance have recently come under fire for potentially posing a security threat. India banned TikTok and several other apps in late June, claiming the apps pose a “threat to sovereignty and integrity.”
In a recent interview, White House trade advisor Peter Navarro called TikTok CEO Keven Mayer an “American puppet” for the Chinese company.
“TikTok and WeChat are the biggest forms of censorship on the Chinese mainland, and so expect strong action on that,” Navarro said.
He didn’t clarify if the action he referenced meant a ban is coming in the near future.
TikTok Users Preparing For The Worst: But regardless of whether or not the U.S. bans TikTok, associating the brand with China and potential data security may be enough to hurt the app and help competitors like Facebook and Google’s YouTube.
“The US is considering banning TikTok over security concerns, but it’s hard to miss the obvious fact that this action would help American companies recapture an audience they 100% missed and were unlikely to regain without aggressive/costly marketing,” DataTrek Research co-founder Nicholas Colas said.
Colas said just the possibility of a ban is already sending many of TikTok’s most popular content creators to competing platforms, even if it’s just a backup plan for the time being.
“Even the threat of a TikTok ban has pushed the platform’s biggest stars to add YouTube/Instagram followers,” Colas said.
Colas said TikTok will likely continue to be a hot topic as the public debate over internet censorship, regulation, security and free speech rages on.
Benzinga’s Take: Somehow, the TikTok platform model came out of nowhere and captured a massive social media following right under the noses of Facebook and Google.
It’s not often that companies get essentially cost-free do-overs when they get something wrong, but a TikTok ban might give Google and Facebook a fresh chance to compete to regain the vast majority of users and engagement hours they lost to TikTok in the past year.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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