GC: ByteDance (TikTok) Fails for good

Aug 2, 2024 Benn-Ibler Rechtsanwälte

Digital Markets Act (DMA): ByteDance remains a gatekeeper. The action for annulment brought by the operator of social network TikTok has finally failed before the General Court of the European Union.

The DMA is an EU regulation that has the aim of ensuring fair competition in order to protect the contestability of digital services through the regulation of gatekeepers. Gatekeepers are companies that operate in several EU countries and have a strong economic position with a significant impact on the internal market. They are subject to certain obligations and prohibited from certain practices to prevent them from favouring their own digital products and services.

ByteDance Ltd, via its subsidiaries, provides the online social networking platform TikTok. By decision of 5 September 2023, the European Commission designated ByteDance as a gatekeeper pursuant to the DMA. In November 2023, ByteDance brought an action for annulment of that decision. Eight months after the action was brought, the General Court has now dismissed ByteDance’s action, giving the following reasons for its decision:

The Court was of the opinion that the Commission’s assessment that Byte Dance was a gatekeeper was correct. ByteDance undeniably met the quantitative thresholds laid down in the DMA in terms of its global market value, the number of TikTok users within the European Union, and the number of years during which that threshold relating to user numbers had been met. It can therefore be presumed that ByteDance is a gatekeeper.

Furthermore, ByteDance’s arguments were not sufficiently substantiated so as to manifestly call into question the presumption that ByteDance had a significant impact on the internal market and that TikTok was an important gateway for business users to reach their end users.

The Court rejected all of ByteDance’s arguments and also concluded that the standard of proof applied by the Commission was correct and that, even though the Commission had made some errors in its assessment of ByteDance’s arguments, those errors had no bearing on the lawfulness of the contested decision.

Press Release No 114/24 on Case T-1077/23 (17 July 2024)