Snap stock waves on a statement that Biden may restrict TikTok

March 20, 2023: On Wednesday, Shares in social media companies Snap and Meta increased after-hours trading after the Biden administration reportedly considered banning TikTok in the U.S. unless Chinese tech firm ByteDance divests its stake.

Snap shares increased nearly 7%, while Meta shares increased over 2% after The Wall Street Journal stated that TikTok meets a possible ban in the U.S. if ByteDance fails to comply with the Biden Administration’s proposition.

Both Snap and Meta state violent contest for user attention from TikTok and have introduced their short-form video products to compete. In the previous 2023, adults in the U.S. are analysing to pay an average of 55.8 minutes daily on TikTok, versus 30.8 minutes on Snapchat, 30.6 minutes on Meta’s Instagram, and 30.2 minutes on Meta-owned Facebook, the research from Insider Intelligence stated.

In the previous week, the White House supported a recent Senate bill that would allow the Biden Administration to prohibit TikTok in the U.S.

U.S. lawmakers have stated concerns that TikTok, by its Chinese ownership, poses a potential national security problem, with U.S. Senator Mark Warner, D-Va., saying, “This competition with China around who dominates technology domains, that is where the nexus of national security lies going forward.”

On Wednesday, ByteDance backed against those allegations and said, “If protecting national safety is the objective, divestment is not okay. The problem is a change in ownership imposing recent restrictions on data flows or access.”

The statement further stated, “The best way to address problems about national security is with the evident, U.S.-based protection of U.S. user data and systems, robust third-party monitoring, vetting, and validation, which we are already implementing.”