TikTok’s setback is Meta’s opportunity.

On Friday, an appeals court upheld a law requiring TikTok's parent company, Byte Dance, to sell the popular short-form video app or face a nationwide ban. While the law does not directly prohibit TikTok, it prevents app stores, such as Apple's App Store and Google's Play Store, from distributing the app unless Byte Dance separates itself from the platform.

While the ruling is a setback for TikTok, it doesn’t mark the end of the battle. Byte Dance is expected to challenge the law in the Supreme Court, which will ultimately decide the app's fate. If the law is upheld, it would deal a significant blow to TikTok’s 170 million U.S. users, content creators, and advertisers.

However, one clear winner in the event of a TikTok ban would be Meta (META), led by Mark Zuckerberg. As TikTok's largest competitor, Meta stands to benefit significantly from the shift. Its short-form video feature, Reels, was introduced in 2020 on Instagram to compete with TikTok's growing popularity. Reels has since evolved, leveraging AI-driven recommendations to keep users engaged, similar to TikTok’s model.

Meta’s efforts appear to be paying off. During its Q1 2023 earnings call, CEO Mark Zuckerberg noted that Reels accounted for 50% of the time users spend on Instagram. By Q3, CFO Susan Li highlighted that 60% of Reels recommendations were from original content, which drives user retention and engagement. While Meta doesn’t disclose the specific revenue generated by Reels, Li confirmed it is a positive contributor to the company’s overall earnings.

If TikTok is banned, many of its creators are likely to migrate to Reels, bringing their followers and advertisers along with them, further boosting Meta’s revenue. This optimism contributed to a 2% rise in Meta’s stock on Friday.

Meta isn’t the only platform poised to gain from a TikTok ban. YouTube Shorts, Google’s (GOOG, GOOGL) competing short-form video platform, could also attract displaced users and advertisers, further strengthening its presence in the market.

The proposed TikTok ban stems from national security concerns over Byte Dance's ties to the Chinese government. U.S. officials worry that Beijing could compel the company to spy on American users or manipulate the app to spread propaganda. The debate continues as the Supreme Court’s decision looms.