TikTok Disputes 'Gatekeeper' Label Under EU Digital Markets Act at Top Court
By Foo Yun Chee
TikTok Challenges EU Gatekeeper Status in Landmark Court Case
LUXEMBOURG, May 12 (Reuters) - Bytedance's social media platform TikTok on Tuesday made a last- ditch attempt at Europe's top court to scrap its designation as a "gatekeeper" under EU rules, which require it to meet tougher standards as regulators seek to curb the power of Big Tech.
The case--the first EU Digital Markets Act "gatekeeper" challenge heard by the EU Court of Justice--could bolster or weaken Europe's attempt to rein in Big Tech to ensure competition and more choice for users.
Background: Gatekeeper Designation and the DMA
TikTok was designated a "gatekeeper" under DMA in September 2023, joining other companies with more than 45 million monthly users. These included Alphabet's Google, Meta Platforms, Apple, Amazon, Microsoft and Booking.com.
A lower court tribunal had in 2024 thrown out TikTok's challenge, saying it met DMA criteria for the gatekeeper designation.
Key Provisions of the Digital Markets Act
The DMA sets out an onerous list of requirements aimed at curbing the power of Big Tech, with infringement fines as high as 10% of a company's annual turnover.
TikTok's Arguments Against Gatekeeper Status
Doesn't Meet the EU's Criteria, TikTok Says
TikTok argued the tribunal had erred in its ruling that the company failed all three criteria for gatekeeper status: significant market impact, acting as a key business gateway to users, and holding an entrenched market position.
Distinct Market and User Dynamics
"ByteDance showed not only that its market cap is overwhelmingly derived from its Asian businesses but also they had no connection to Europe, face different competitive dynamics and operate in a distinct regulatory, linguistic and cultural environment," TikTok's lawyer Bill Batchelor said at Europe's top court.
He told the panel of 15 judges that 70%-80% of TikTok users use multiple other platforms in parallel, including Meta Platform's Facebook and Instagram, Snap and X, and hence were not locked into TikTok's ecosystem.
The Concept of Multihoming
"We refer to this as 'multihoming.' That means businesses can reach the same end users via multiple other platforms," Batchelor said.
European Commission's Response
A European Commission lawyer dismissed TikTok's arguments.
Addressing Multihoming and User Lock-In
"Lock-in can occur even when some degree of multihoming exists. For example, there may be specific user groups that depend on TikTok," Mislav Mataija told the Court.
Next Steps and Broader Implications
The Court will rule in the coming months. Meta Platforms is also contesting its gatekeeper designation for Messenger and Marketplace.
The case is C-627/24 P Bytedance v Commission.
(Reporting by Foo Yun CheeEditing by Bernadette Baum)
