EU Court Upholds Gatekeeper Label for ByteDance, Boosting Regulators

TikTok owner ByteDance lost its court battle against its status as a gatekeeper under new EU laws on Wednesday, boosting antitrust regulators’ efforts to limit Big Tech

By the EU Digital Markets Act (DMA), gatekeepers must ensure that their messaging applications are compatible with their competitors, enable users to select which applications to pre-install on their devices, and refrain from prioritizing their services over competitor services.

ByteDance had contended that its designation could subvert the DMA’s objective by safeguarding dominant companies from newer competitors, such as TikTok, which lacks an entrenched position.

ByteDance’s challenge was dismissed by the General Court in Luxembourg, which concurred with the European Commission, the EU executive, and argued that ByteDance had not adequately substantiated its arguments.

ByteDance can file an appeal with the Court of Justice of the European Union, the highest court in Europe.

“The Commission was fully entitled to consider that Bytedance was a gatekeeper,” the judicial panel stated.

The judges determined that the company satisfied the quantitative thresholds established by the DMA concerning its global market value, the number of TikTok users in the EU, and the number of years during which the user numbers threshold had been met.

The General Court also noted that TikTok’s surge in prominence was comparable to that of its competitors, Meta Platforms and Alphabet.

“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 judges stated.

ByteDance expressed its disappointment with the decision.

“While we will now evaluate the next steps, we have already taken measures to comply with the relevant obligations of the DMA ahead of last March’s deadline,” according to a TikTok representative. The Commission acknowledged the judgment in an email statement and said it would investigate it.

Alphabet, Amazon, Apple, Booking.com, Meta Platforms, and Microsoft are additional organizations designated as gatekeepers.Apple has also contested the DMA, asserting that its five App Stores on iPhones, iPads, Mac computers, Apple TVs, and Apple Watches should not be classified as a single central platform service. It also criticizes regulators for referring to its operating system, iOS, as a critical gateway for business users.

Meta is also disputing the gatekeeper designation for its Messenger and Marketplace platforms.

The DMA aims to guarantee an equitable playing field for competitors and to provide consumers with a greater variety of options.