This report is exclusively available to Business Insider subscribers, inviting readers to delve deeper into the intriguing dynamics of social media competition. With the ongoing discussions surrounding the future of TikTok amidst regulatory scrutiny, Instagram stands to gain substantially if TikTok is ultimately banned from operating in the U.S.

Recent developments have shed light on how much Instagram could capitalize on TikTok's challenges. During the Federal Trade Commission (FTC) antitrust trial, a chart presented in Meta's opening statement illustrated a notable uptick in Instagrams user engagement when TikTok was temporarily unavailable in January. Meta's lawyer, Matt Hansen, highlighted this dramatic shift, stating, "People went to Instagram. Boom almost instantly." This comment underscores the immediate impact that TikTok's absence had on Instagram's traffic.

The chart revealed that Instagram experienced a significant increase in the average time users spent on its platform during the approximate 14-hour hiatus of TikTok in the United States. However, once TikTok resumed operations, the time spent on Instagram reverted to its typical levels. This fluctuation raises questions about user loyalty and the potential for Instagram to attract TikTok's audience permanently if the latter faces a more extended ban.

As TikTok's future hangs in the balance, it is essential to recognize that this situation arose following an executive order signed by former President Donald Trump on April 4. The order granted TikTok an additional 75 days to find a resolution that aligns with U.S. legal standards regarding its ownership, specifically the divest-or-ban law. The social media app, which is owned by the Chinese company ByteDance, is under pressure to identify a new owner for its U.S. operations, a task that has proven complicated and fraught with challenges.

Should TikTok face a permanent ban, Instagram is likely to see a substantial influx of new users migrating to its platform. This migration could lead to increased engagement on Meta's suite of applications, including Instagram and Facebook, both of which have integrated short-form video features that appeal to users looking for similar content. As a result, this shift in user dynamics could translate into significantly higher advertising revenues for Meta.

According to estimates from eMarketer, a sister company of Business Insider, Meta could potentially increase its advertising revenue by anywhere from $2.46 billion to $3.38 billion if TikTok were to be banned. This financial incentive further illustrates the stakes involved in the ongoing discussions around TikTok's operations in the U.S.

In addition to these developments, Instagram is preparing to launch a new editing application designed for its short-form video feature, known as Reels. This upcoming application, dubbed Edits, is expected to compete directly with ByteDance's popular video editing tool, CapCut. The introduction of new features and applications indicates Instagram's commitment to enhancing user experience while potentially attracting users who may seek alternatives to TikTok.