The European Union Commission has classified TikTok, the video platform operated by ByteDance, as an influential platform. The EU court made this decision. The judges dismissed the Chinese company’s lawsuit challenging its designation as a gatekeeper under the Digital Markets Act (DMA). TikTok is therefore subject to special EU rules. ByteDance can still appeal the decision to the European Court of Justice (ECJ).
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Regulator: Telecom’s fiber optic holdings need to be opened up to competitionCompanies have had to comply with the DMA since the beginning of March this year. If they violate it, they face severe penalties. It aims to ensure more competition among digital services and give new competitors a better opportunity. The EU considers some large platform operators so powerful that they can abuse their market position. The DMA should break this by creating rules for gatekeepers. These include US companies Apple, Amazon, Microsoft, Alphabet and Meta.
Like TikTok, Facebook’s parent objected to its classification as a gatekeeper in November 2023. There is no decision in the case yet.
“Important gateway for users”
In particular, the EU court rejected ByteDance’s argument that the company’s global market value was mainly due to its activities in China and did not have a significant impact on the EU’s internal market. TikTok is an important access gateway for users, The court said,
ByteDance also argued that the company was just a new entrant in the market. Meta or Google’s parent company Alphabet would have immediately contested its position with competing products. The judges did not follow this: ByteDance succeeded in increasing the number of users on TikTok “very quickly and exponentially” and within a short time – measured in terms of the number of users in the EU – achieved half the distribution of Facebook and Instagram. Young people in particular use TikTok intensively.
Several companies, including Zalando, had already announced their intention to take action against the law. ByteDance’s lawsuit is the first to be heard in an EU court.
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