TikTok Loses ‘Gatekeeper’ Label Appeal In EU Court

Posted: July 19, 2024

ByteDance, the Chinese owner of TikTok, has lost its appeal against being labeled a “digital gatekeeper” by the European Union. The EU General Court in Luxembourg upheld the designation, citing ByteDance’s global market value and its substantial user base in the EU under the Digital Markets Act (DMA).

The court ruled that TikTok‘s classification as a gatekeeper was justified as it met the criteria set out in the DMA, which includes thresholds related to market value and user numbers within the EU. This designation imposes restrictions on companies, preventing them from mandating users in the EU to consent to accessing services or specific functionalities. TikTok gatekeeping under these regulations aims to ensure a fair and competitive digital market environment.

ByteDance had argued that its global market value primarily stemmed from China, not the EU, and that TikTok operated differently from established digital monopolies like Meta (Facebook, Instagram) and Alphabet (Google). However, the court dismissed these arguments, noting TikTok’s rapid and exponential growth in user numbers since its entry into the market in 2018.

In response to the ruling, a ByteDance spokesperson expressed disappointment and reiterated TikTok’s role as a challenger in the digital market. The spokesperson highlighted that TikTok had already begun complying with DMA requirements since March but indicated the possibility of appealing the decision at the European Court of Justice within the next two months and ten days.

The ruling marks a significant development in the EU’s regulatory efforts to curb the dominance of large tech companies and ensure fair competition within the digital market. By upholding TikTok’s designation as a gatekeeper, the court reinforces the EU’s stance on holding powerful platforms accountable for their market conduct and data practices. This decision aligns with broader efforts across Europe to enforce stricter regulations on digital platforms, aiming to protect consumer rights and foster a level playing field for all businesses.

TikTok’s gatekeeper status under the DMA also brings into focus its compliance with the EU privacy policy and other regulatory frameworks. The company’s efforts to align with these regulations will be closely monitored, impacting its operations and strategic decisions in various markets, including the EU. ByteDance’s ongoing legal challenges reflect the complexities and debates surrounding the regulation of global tech giants operating across different jurisdictions. As TikTok continues to expand its influence and user base worldwide, navigating regulatory frameworks will remain a critical issue for the company. The outcome of potential further appeals to the European Court of Justice will be closely watched, as it could shape future regulatory approaches towards digital platforms across the EU and beyond.