EU Court says European Commission can label TikTok as a gatekeeper

According to the General Court of the Court of Justice of the European Union, the European Commission is allowed to designate ByteDance’s social media platform TikTok as a gatekeeper, as is determined to the Digital Markets Act (DMA).

In September 2023, the Digital Markets Act or DMA came into effect to contribute to the proper functioning of the internal European market, offering a level playing field and more choices for consumers.

Companies with over 45 million active monthly users and a market value of at least 75 billion euros, also called Very Large Online Platforms (VLOPs) or gatekeepers, have a great responsibility to ensure the contestability and fairness of markets in the digital sector.

Tech companies like Alphabet, Apple, Meta and Microsoft were labeled as gatekeepers pursuant to the DMA. The same goes for ByteDance, the Chinese parent company of TikTok.

The European Commission argued that the owner of the popular video platform met both the quantitative thresholds and global market value laid down in the DMA. TikTok is an important gateway, allowing business owners to reach their target audience. Furthermore, the company has an “entrenched and durable position” and therefore a significant impact on the European market.

ByteDance however didn’t agree with the Commission’s assessment and appealed to the General Court of the Court of Justice of the European Union. The owner of the video platform argued that its global market value was mainly attributable to its activities in China and therefore had little impact on the EU market. The company also pleaded that it was a lot smaller than online social networking services like Facebook and Instagram.

The General Court rejected both of ByteDance’s arguments. Since its launch in 2018, TikTok grew exponentially in a short period of time and gained a lot of popularity with young users, who spent more time on TikTok than other social networks. Moreover, the company’s position was consolidated rapidly and strengthened over the following years.

According to Reuters, ByteDance was disappointed by the General Court’s ruling. “While we will now evaluate next steps, we already took measures to comply with the relevant obligations of the DMA ahead of last March’s deadline,” a TikTok spokesperson said.

ByteDance can appeal to the General Court’s decision.