Shares of social media companies Meta Platforms (META) and Snap (SNAP) are rising after U.S. President Joe Biden threatened to ban Chinese social media app TikTok nationwide in America.
Specifically, Biden called on TikTok’s parent company ByteDance to divests its stake in the popular Chinese app or face a permanent ban in the U.S.
Biden’s stern warning sent Snap’s share price up 7% while Meta’s stock rose 2%.
TikTok, which enables people to post and view short form videos, is among the most popular social media apps in the world and a key competitor of both Meta Platforms, which owns Facebook, and Snap, which operates Snapchat.
Adults in the U.S. spend an average of 55.8 minutes each day on TikTok, which is nearly double the 30 minutes spent on both Snapchat and Meta-owned apps Instagram and Facebook, according to data from Insider Intelligence.
Last week, the White House announced its support of a recent Senate bill that would give President Biden the authority to unilaterally ban TikTok in the U.S.
Lawmakers in the U.S. are worried that TikTok poses a national security threat as the Chinese government is reported to be using the social media app to spy on people, track their movements, and steal personal data.
The U.S. federal government and several state governments have banned TikTok from the smartphones used by civil servants.
Other countries, including Canada, have followed suit, with Ottawa banning civil servants from having the TikTok app on their work phones. Several provinces, including Quebec, have enacted similar bans, citing security concerns.
ByteDance has pushed backed against allegations of spying, saying in a written statement that “If protecting national security is the objective, divestment doesn’t solve the problem.”
ByteDance added that “The best way to address concerns about national security is with the transparent, U.S.-based protection of U.S. user data and systems, with robust third-party monitoring, vetting, and verification...”
Meta Platforms’ stock is down 3% over the past 12 months and trading at just under $200 U.S. per share. Snap’s stock has fallen 68% in the last year to trade at $10.34 U.S. per share.
