ByteDance Loses Court Challenge Against EU Gatekeeper Designation

In a significant development for antitrust regulation, ByteDance, the owner of TikTok, has lost its legal challenge against being designated as a gatekeeper under the European Union’s (EU) Digital Markets Act (DMA). The ruling, delivered by the Luxembourg-based General Court on Wednesday, is a boost for EU regulators aiming to rein in the power of Big Tech.

The DMA imposes stringent requirements on companies classified as gatekeepers. These include making their messaging apps interoperable with competitors, allowing users to choose which apps to pre-install on their devices, and prohibiting the prioritization of their own services over those of rivals.

ByteDance contended that its designation as a gatekeeper could counteract the DMA’s objectives by protecting established companies from newer competitors like TikTok, which lacks an entrenched market position. However, the General Court dismissed this argument, siding with the European Commission, the EU’s executive branch. The court stated that ByteDance had not provided sufficient evidence to support its claims.

“The Commission was fully entitled to consider that ByteDance was a gatekeeper,” the judges affirmed. They further noted that ByteDance met the DMA’s quantitative criteria, including global market value, the number of TikTok users within the EU, and the duration over which these user numbers had been maintained.

The ruling reinforces the EU’s stance on regulating major digital platforms and ensuring fair competition. ByteDance has the option to appeal this decision to the Court of Justice of the European Union, the highest court in Europe.

This case marks a pivotal moment in the ongoing efforts by EU regulators to address the dominance of major tech firms and promote a more competitive digital market landscape. The decision underscores the rigorous enforcement of the DMA and sets a precedent for future cases involving other tech giants.

Source: Reuters