ByteDance, which owns the short video platform TikTok, lost court hearings in which it tried to challenge its “gatekeeper” status in the region, which imposes additional responsibilities on it.
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Under Europe’s Digital Markets Act (DMA), gatekeepers are required to ensure that their messaging systems are compatible with competitors’ platforms; allow users to independently decide which applications to install on their devices; Gatekeepers also do not have the right to favor their own services over the solutions of competitors. According to ByteDance, assigning it this status undermines the original goals of the DMA, since it strengthens the position of dominant companies in the market in the fight against new competitors like TikTok, which does not have an established position.
The European Court of General Jurisdiction, sitting in Luxembourg, sided with the European Commission, the EU’s executive body, and rejected ByteDance’s claim, calling the Chinese company’s arguments insufficiently substantiated. “The Commission had every reason to consider ByteDance an ‘intermediary,’” the decision said. ByteDance meets all of the DMA’s criteria regarding the company’s market value, the number of TikTok users in the EU and the time frame within which it was reached, the judges said. The court also pointed to the surge in popularity of TikTok, which put the platform on par with competing solutions from Meta✴ Platforms and Alphabet: the short video service strengthened its position despite the launch of Instagram✴ Reels and Facebook✴ Reels formats, as well as YouTube Shorts; and in a short time increased its audience to half of Facebook✴ and Instagram✴ in the EU.
«While we will now evaluate next steps, we have already taken steps to comply with the relevant DMA obligations before they take effect in March,” a TikTok spokesperson said. The company can now appeal to the Court of Justice of the European Union, Europe’s highest court. The European Commission stated that it has taken note of the decision and will study it. Alphabet, Amazon, Apple, Booking.com, Meta✴ Platforms and Microsoft have also been appointed as gatekeepers in the EU. Apple is trying to challenge the DMA’s claims, arguing that the app stores for iPhone, iPad, Mac computers, Apple TV and Apple Watch cannot be considered a single platform, and iOS cannot be considered an important gateway for business users. Meta✴ does not agree with the assignment of this status in relation to the Messenger and Marketplace platforms.