China Tiktok operator Bytedance fails with lawsuit

The Chinese Bytedance Group, which operates the video portal Tiktok, has failed with a lawsuit against its classification as a so-called digital gatekeeper. The General Court of the European Union in Luxembourg dismissed the complaint on Wednesday.

This means that Bytedance must adhere to stricter rules in favor of users; the new rules of the Digital Markets Act (DMA) apply.

In September, the EU Commission placed Bytedance on the list, which also includes other large companies such as Google parent Alphabet, Apple, Amazon, Meta and Microsoft. Bytedance appealed against this decision. An application to temporarily suspend it failed in February - now the EU court has also rejected the complaint itself.

A company can be classified as a gatekeeper if it is "economically strong, has a significant impact on the European market and is active in several EU countries". The market power of these gatekeepers of the internet is to be restricted.

According to the Court's decision, the Commission was right to assume that Bytedance is such a gatekeeper. The thresholds for market value and the number of users in the EU had been reached for years. The group had also not been able to rebut the presumption that it had a significant influence on the internal market, the court stated. Tiktok serves companies as an important access point to consumers and Bytedance has a consolidated and permanent position.

Bytedance had argued that its global market value was mainly due to its distribution in China and that the group only had a small turnover in the EU. However, the court stated that the large number of users in Europe, combined with the high global market value, reflected Bytedance's financial performance and the ability to monetize the number of these users.

In an initial reaction, the company expressed its "unhappiness" with the decision. Tiktok is a challenger and an important competitor for the established players, it said. The Group announced that it would consider the next steps. However, measures had already been taken before the deadline in March to fulfill the obligations arising from the law. If the new rules are breached, companies could face penalties running into billions.

SDA