ByteDance's Appeal Against EU's 'Gatekeeper' Designation Rejected
TapTechNews July 17th news, the Court of Justice of the European Union (CJEU) ruled on July 17th that it rejected ByteDance's appeal against the EU's decision to identify it as a gatekeeper. This is a victory for the EU antitrust regulator that seeks to limit the power of tech giants.
According to the EU's Digital Markets Act (DMA), tech giants identified as gatekeepers must allow their messaging apps to interoperate with competitors, let users decide which apps to pre-install on their devices, and not favor their own services. ByteDance had argued that this identification could undermine the goals of the DMA as the act is designed to protect emerging competitors, and TikTok is precisely such an emerging competitor that has not yet established a solid position.
The General Court of Luxembourg supported the decision of the European Commission and rejected ByteDance's appeal, believing that the company failed to sufficiently prove its point. The court stated that the European Commission was fully justified in considering ByteDance a gatekeeper. The court noted that ByteDance meets the quantitative criteria of the DMA regarding global market capitalization, the number of EU users, and the number of years that the user count has reached the threshold. In addition, the court also emphasized the rapid rise of TikTok, making it comparable to competitors under Meta and Alphabet.
The court said that TikTok has rapidly consolidated and strengthened its position in a short period of time, and even in the face of competitors such as Reels and Shorts, its number of EU users has reached half that of Facebook and Instagram.
The European Commission last September initially designated six companies, Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft, as gatekeepers under the Digital Markets Act, involving 22 core platform services they provide.
TapTechNews noted that the Digital Markets Act stipulates the obligations of large online platforms, and these companies must allow business users to access the data they generate on the platform, allow them to promote their products, and conduct transactions with customers outside the platform.
Gatekeeper enterprises refer to those large enterprises that provide core platform services such as social networks and search engines, with a market capitalization of at least 75 billion euros or an annual turnover of 75 billion euros, and also need to have at least 45 million end users per month in the EU and 10,000 business users per year. If the relevant enterprises violate the Digital Markets Act, they will face a fine of up to 10% of their global annual turnover in the previous fiscal year and a repeat fine of up to 20%.
Last year, ByteDance, Apple, and Meta appealed against being designated as gatekeepers by the EU.