TikTok loses bid to ditch EU digital gatekeeper designation

The European Union Court of Justice Wednesday dismissed TikTok’s legal challenge to its digital gatekeeper status.

TikTok’s Chinese owner, Bytedance, argued that its global market value was mostly from operations in China and thus its impact on the EU market was not significant enough to warrant the designation under the Digital Markets Act but the EU court rejected its legal arguments.

“By today’s judgment, delivered eight months after the action was brought, the Court dismisses Bytedance’s action,” the court said in a statement.

“The Commission was fully entitled to consider that Bytedance was a gatekeeper. In that connection, it observed that it was common ground that Bytedance met the quantitative thresholds laid down in the DMA.”

The DMA regulates the internal digital market in the EU “by laying down rules to ensure the contestability and fairness of markets in the digital sector in general, and for business users and end users of core platform services provided by gatekeepers in particular,” according to the Court of Justice.

“The Commission was entitled to consider that Bytedance’s high global market value, together with the large number of TikTok users in the European Union, reflected its financial capacity and its potential to monetize those users,” the court said.

According to the court, Bytedance had 125 million EU end users and more than 10,000 business users in 2022, far exceeding the DMA digital gatekeeper threshold of at least 45 million end users and 10,000 business users.

The court ruling also rejected Bytedance’s argument that it did not have a digital ecosystem and did not benefit from network or lock-in effects. Also rejected was Bytedance’s assertion that it did not enjoy an entrenched and durable position in the market.

Bytedance’s allegations that its rights were infringed and the legal principle of equal treatment was violated were also rejected by the Court of Justice.

Having lost its case, Bytedance was ordered to pay court costs, “including those relating to the proceedings for interim measures.”