Bytedance Loses Gatekeeper Status Appeal
Bytedance, the parent company of TikTok, has lost its appeal against a European Commission decision that designates it as a gatekeeper under the Digital Markets Act (DMA). The General Court in Luxembourg ruled against Bytedance’s appeal, confirming that TikTok meets the criteria for gatekeeper status under the new EU competition rules.
TikTok’s Initial Appeal and Concerns
Last November, TikTok joined Meta in challenging their gatekeeper designations under the DMA, a law that imposes stricter regulations on tech giants and facilitates user movement between competing services. TikTok argued that its designation could undermine the DMA’s objective by protecting established gatekeepers from newer competitors like itself.
Court’s Rationale for Gatekeeper Status
The court ruled that TikTok qualifies as a gatekeeper due to its substantial global market value, significant number of EU users, and consistent meeting of user thresholds over the years. Bytedance’s claim that its global market value, primarily derived from activities in China, indicated minimal impact on the EU market was rejected by the court.
Financial Capacity and Market Impact
The court affirmed that the European Commission was justified in considering Bytedance’s high global market value and large EU user base as indicators of its financial strength and potential to monetize users. Despite Bytedance’s argument that it was a market challenger facing competition from Meta and Alphabet’s similar services, the court noted that TikTok quickly solidified and strengthened its market position since 2018.
Response and Compliance Efforts
Following the ruling, a TikTok spokesperson expressed disappointment but acknowledged that the platform is a crucial competitor to incumbent players. While evaluating further steps, TikTok has already taken measures to comply with the DMA obligations ahead of the March deadline. This ruling underscores the EU’s commitment to enforcing stringent regulations on major tech companies to promote fair competition.
SOURCE: Ref Image from Punch Newspaper
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