India removed TikTok and other Chinese apps from their app store because of stealing data of Indian nationals. Following India's bold ban, Trump told reporters that he could ban TikTok from operating in the US through emergency economic powers or an executive order. Treasury Secretary Steven Mnuchin said on Sunday that there was bipartisan agreement that TikTok could not stay in its current format, citing the risk of sending user data back to China on 100mn Americans.
Snap ad manager data suggests MAUs in India have risen 23%, vs +7% in the comparable period pre-ban. We believe an outright ban of TikTok would be a significant tailwind to all social media applications as they would: 1) likely launch similar applications and see an engagement boost; and 2) ease potential pricing pressure related to TikTok's recent self-serve ad launch in the US. We see this scenario as unlikely as press reports indicate Trump has given TikTok 45 days to negotiate a deal.
As far as continued TikTok operations on Microsoft's cloud, we think the US government is unlikely to trust TikTok the protection of US data, and will require a spin-off. Also, on a high level, intervention by the US government will discourage US investment by Chinese companies, a positive for US and other Internet companies worldwide.
