FILE PHOTO: The ByteDance logo is seen at the company's office in Shanghai, China July 4, 2023. REUTERS/Aly Song/File Photo
BRUSSELS (Reuters) -TikTok owner ByteDance on Wednesday lost its court challenge against its designation as a gatekeeper under landmark European Union rules, in a boost for antitrust regulators seeking to curb the power of Big Tech.
Under the EU Digital Markets Act (DMA), gatekeepers are required to make their messaging apps interoperate with rivals, let users decide which apps to pre-install on their devices and are not allowed to favour their own services over rivals.
ByteDance had argued that its designation could undermine the DMA goal by protecting dominant companies from newer competitors such as TikTok, which does not have an entrenched position.
The Luxembourg-based General Court sided with the European Commission, the EU executive, and dismissed its challenge, saying that ByteDance had not sufficiently substantiated its arguments.
ByteDance can appeal to the Court of Justice of the European Union, Europe's highest.
"The Commission was fully entitled to consider that Bytedance was a gatekeeper," judges said.
The judges said the company met the DMA's quantitative thresholds, regarding its global market value, the number of TikTok users within the EU and the number of years during which that threshold relating to user numbers had been met.
The General Court also pointed to TikTok's jump in popularity as putting it on a par with rivals Meta Platforms and Alphabet.
"It had rapidly consolidated its position, and even strengthened that position over the following years, despite the launch of competing services such as Reels and Shorts, to the point of reaching, in a short time, half the size, in terms of number of users within the European Union, of Facebook and of Instagram," judges said.
ByteDance said it was disappointed with the 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.
The Commission took note of the judgment and would study it, it said in an emailed statement.
Other companies designated as gatekeepers are Alphabet, Amazon, Apple, Booking.com, Meta Platforms and Microsoft.
Apple has also challenged the DMA, saying that its five App Stores on iPhones, iPads, Mac computers, Apple TVs and Apple Watches should not be labelled as a single core platform service. It also faults regulators for characterising its operating system iOS as an important gateway for business users.
Meta is also contesting the gatekeeper label for its Messenger and Marketplace platforms.
The DMA seeks to ensure a level playing field for rivals and more choices for consumers.
The case is T-1077/23 Bytedance v Commission.
(Reporting by Foo Yun Chee; editing by Philip Blenkinsop, Louise Heavens and Barbara Lewis)
