ByteDance Loses Court Challenge Against Gatekeeper Designation

ByteDance, owner of TikTok, lost a court challenge against its gatekeeper designation under the EU Digital Markets Act (DMA). The Luxembourg-based General Court sided with the European Commission, dismissing ByteDance's argument. The ruling bolsters antitrust efforts to curb Big Tech's power. ByteDance may appeal the decision.

On Wednesday, ByteDance, the owner of TikTok, faced a significant legal defeat in its challenge against being designated as a gatekeeper under the European Union's landmark rules, a move that supports antitrust regulators aiming to rein in Big Tech's dominance. The EU Digital Markets Act (DMA) mandates gatekeepers to make messaging apps interoperable with rivals and allows users to choose which apps to pre-install on their devices, among other provisions.

ByteDance contended that its designation could counteract the DMA's objectives by shielding dominant firms from newer competitors like TikTok. However, the Luxembourg-based General Court upheld the European Commission's stance, dismissing ByteDance's challenge for lack of sufficient evidence. The ruling emphasized ByteDance's compliance with the DMA's thresholds, given TikTok's substantial market value, its user base within the EU, and the longevity of these metrics.

With TikTok's popularity rising to rival established platforms such as Meta and Alphabet, ByteDance expressed disappointment with the decision but indicated plans to assess further actions. While ByteDance may appeal to the Court of Justice of the European Union, other tech giants like Apple and Meta are also contesting their gatekeeper labels. This precedential case, T-1077/23 Bytedance v Commission, underscores the DMA's goal of fostering competition and offering consumers more choice.

(With inputs from agencies.)