TikTok Parent Loses Bid To Avoid EU ‘Gatekeeper’ Label

TikTok parent ByteDance has been told by a European court that it must keep its European Commission’s designation of being a ‘gatekeeper’ platform.

Reuters reported that ByteDance on Wednesday lost its court challenge against the gatekeeper designation under the landmark Digital Markets Act (DMA) rules, which came into force in August 2023.

The EU has so far designated 22 services owned by Apple, Google, Microsoft, Amazon, Facebook parent Meta Platforms and TikTok owner ByteDance as gatekeepers.

Gatekeeper status

Under the DMA companies with more than 45 million monthly active users and a market capitalisation of 75 billion euros ($82 billion) are considered gatekeepers providing a core platform service.

Under the DMA, gatekeepers are required to make their messaging apps interoperate with rivals, let users decide which apps to pre-install on their devices, and are not allowed to favour their own services over rivals.

TikTok, Facebook, Instagram, LinkedIn, WhatsApp, Messenger, Google Maps, Google Play, Google Shipping, Amazon Marketplace, Apple App Store, Meta Marketplace, Youtube, Google (ads), Amazon (ads), Meta (ads), Chrome (browser), Safari (browser), Google Search, Google Android, iOS, and Windows PC OS were among the platforms designated as gatekeeper platforms.

ByteDance in its challenge had argued that its designation could undermine the DMA goal by protecting dominant companies from newer competitors.

Court ruling

But Reuters reported that the Luxembourg-based General Court sided with the European Commission, and dismissed its challenge, ruling that ByteDance had not sufficiently substantiated its arguments.

ByteDance however can appeal to the Court of Justice of the European Union, Europe’s highest.

“The Commission was fully entitled to consider that Bytedance was a gatekeeper,” judges reportedly said.

The judges said the company met the DMA’s quantitative thresholds, regarding its global market value, the number of TikTok users within the EU and the number of years during which that threshold relating to user numbers had been met.

The General Court also pointed to TikTok’s jump in popularity as putting it on a par with rivals Meta Platforms and Alphabet.

“It had rapidly consolidated its position, and even strengthened that position over the following years, despite the launch of competing services such as Reels and Shorts, to the point of reaching, in a short time, half the size, in terms of number of users within the European Union, of Facebook and of Instagram,” judges were quoted as stating.

Next steps

ByteDance reportedly said it was disappointed with the ruling.

“While we will now evaluate next steps, we already took measures to comply with the relevant obligations of the DMA ahead of last March’s deadline,” a TikTok spokesperson was quoted by Reuters as saying.

The European Commission meanwhile stated that it took note of the judgement and would study it, it said in an emailed statement to Reuters.