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When TikTok was first designated as a gatekeeper last September, it appealed the decision claiming it does not meet the threshold to be one.
TikTok has lost its challenge to its designation by the European Commission as a ‘gatekeeper’ platform under the bloc’s antitrust laws in the EU General Court today (17 July).
Based in Luxembourg, the court ruled that TikTok parent ByteDance is powerful enough and meets the requirements to be deemed a gatekeeper under the Digital Markets Act (DMA), the EU rules to crack down on anti-competitive behaviour among Big Tech companies that took effect in November of 2022.
The EU defines gatekeepers as large digital platforms providing “core” services – such as app stores, search engines and web browsers – with at least 45m monthly end users in the EU and 10,000 annual business users. Some other major tech companies considered gatekeepers include Alphabet, Amazon, Apple, Meta and Microsoft.
Under the DMA, gatekeepers are required follow rules such as ensureing interoperability between their messaging apps and those of rivals, and letting users decide which apps to pre-install on their devices.
When TikTok was first designated as a gatekeeper last September, it appealed the decision claiming it does not meet the threshold to be one and that labelling it as such will protect “actual gatekeepers” from newer competitors like itself.
Now, the General Court has dismissed the challenge because it believes ByteDance has not sufficiently substantiated its arguments and that the Commission is “fully entitled” to consider ByteDance as a gatekeeper.
“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,” the court said.
“The court also found that the standard of proof applied by the Commission was correct and that, even though the Commission had made some errors in its assessment of ByteDance’s arguments, those errors had no bearing on the lawfulness of the contested decision.”
The decision can now be appealed to the EU’s top court, the European Court of Justice. “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 spokesperson for TikTok said.
Earlier this year, the Commission opened a formal investigation into TikTok amid suspicions of potential breaches of the Digital Services Act.
Meanwhile, the Chinese-owned company faces a potential ban across the Atlantic, where US lawmakers want TikTok to divest from ByteDance if it is to continue operating in the country.
But in an interview with Bloomberg Businessweek yesterday, former US president and current presidential candidate Donald Trump – who recently survived an assassination attempt during a rally in Pennsylvania – said he is “for TikTok” because its presence will increase competition. “If you don’t have TikTok, you have Facebook and Instagram,” he said.
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