Market Overview

Facebook Preparing To Launch TikTok Rival In US, 50 Other Markets

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Facebook Preparing To Launch TikTok Rival In US, 50 Other Markets

Facebook Inc (NASDAQ: FB) says it is getting ready for the launch of Instagram Reels, a rival to short-form video app Tiktok, in the United States and 50 other countries in August, the company announced on Thursday.

What Happened

First launched in Brazil in November, the social media giant then launched Reels in France and Germany in June. It became available in India last week after the country banned TikTok and several other Chinese applications, reported NBC News.

Reels is considered similar to TikTok as it lets users share 15-second video clips featuring music from its catalog. Other similarities include the ability to borrow music from other users' videos and a "Featured Reels" section that contains popular videos.

Facebook plans to introduce Reels in the United States, the United Kingdom, Japan, Mexico, and other countries.

Why It Matters

TikTok has seen its popularity grow during the COVID-19 pandemic; the app was downloaded more than 315 million times in the first three months of 2020, according to a market intelligence provider Sensor Tower.

The ByteDance-owned app is under fire over privacy and data sharing concerns and is evaluating changes to its corporate structure to be able to operate as a U.S. company.

The Donald Trump administration is considering action against TikTok under a law that gives the president powers to regulate foreign companies considered to pose extraordinary threats, Reuters reported.

Price Action

On Thursday, Facebook shares traded 0.43% lower at $239.89 in the after-hours session. The shares closed 0.27% at $240.93 in the regular session.

 

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