Brussels (The Brussels Morning Newspaper) – The EU Court of Justice supported the European Commission’s choice to designate TikTok’s parent company Bytedance as a gatekeeper under the Digital Markets Act, disregarding all arguments raised by the company.
The European Commission specified Bytedance, TikTok’s parent company, as a gatekeeper last September, which the Chinese company petitioned last November. ByteDance noted in a post at the time that its application does not carry an “entrenched” position, is not an incumbent in the digital advertising market, and does not fulfil the European Economic Area revenue threshold of the law.
The General Court disregarded Bytedance’s challenge, claiming that its potential to monetise users and its compact position justify the EU Commission’s designation. The European Consumer Organisation (BEUC), an umbrella body representing consumers across 31 European countries, accommodated the Court’s ruling, stressing ByteDance’s obligation to concede with DMA regulations on personalised advertising approval, bolstering user privacy.
How did TikTok respond to the EU Court ruling?
“We are disappointed with this judgment,” a TikTok spokesperson told Euractiv, adding that the platform challenges established players and plays a crucial function in fostering competition. “While we assess our next steps, we have already taken measures to comply with the DMA’s obligations well ahead of the March deadline,” the spokesperson stated.
What arguments did Bytedance raise against gatekeeper status?
Bytedance had claimed that it did not satisfy the DMA’s revenue criteria to be a gatekeeper, which is €7.5 billion per year in the European Economic Area. But the EU Commission is “entitled” to assume “Bytedance’s high global market value” along with “the large number of TikTok users” in the EU, contemplate its “financial capacity and its prospect to monetise those users,” stated the Court.
Why was Bytedance’s challenge dismissed by the General Court?
The Court also discovered TikTok’s rapid growth and high attention rates in the EU significant. This varied Bytedance’s argument that it did not profit from lock-in effects like other social media, meaning retailers or consumers are dependent on TikTok for service, according to the Court’s press release.
ByteDance claimed that they were challengers in the market, unlike more designated companies like Meta and Alphabet, who quickly earned ground with similar services such as Reels and Shorts, mocking TikTok’s main features.
Why is ByteDance considered a gatekeeper by the EU?
But TikTok’s quick growth and substantial user base in the EU showed that it has “consolidated its position,” stated the court, dismissing the argument. The Commission’s measure of proof, which refers to the level of proof the EU executive needed to provide to explain its decision, was also deemed reasonable by the Court. Minor mistakes in the EU Commission’s assessment did not influence the overall decision’s legality
The declaration by the General Court of Bytedance as a gatekeeper backs EU efforts to regulate prevalent tech companies. The General Court is a constituent court of the Court of Justice of the EU. The EU’s Digital Markets Act (DMA) points out digital competition by designating gatekeepers to assure fair competition in critical internet sectors. Some of the gatekeepers include Alphabet, Apple, Meta, Amazon, and Microsoft.
