The EU Luxembourg-based General Court rejected today TikTok’s appeal against the new EU digital rules aimed at regulating big tech. The Digital Markets Act (DMA), which came into force in March, is designed to create a more equitable market. As a result, big tech platforms must comply with the new EU regulations.
The European Commission designated five “gatekeepers” under the DMA facing the curbs: Google parent Alphabet, Amazon, Apple, Meta, and Microsoft. On 25 April 2023, the Commission classified TikTok, the only non-US company, as a Very Large Online Platform under the DSA due to its EU user base exceeding 45 million average active users. Since the end of August 2023, TikTok, which ByteDance owns, has been required to comply with the DSA’s obligations.
The Luxembourg-based General Court’s decision is the first judgement on a DMA challenge by big tech, with cases lodged by Apple and Meta still pending.
“The Court dismisses ByteDance’s action,” it said. TikTok can appeal against the ruling within two months and ten days of the decision.
“TikTok had succeeded in increasing its number of users very rapidly and exponentially, reaching, in a short time, half the size of Facebook and Instagram, and a particularly high engagement rate, with young users in particular, who spent more time on TikTok than on other social networks,” the court said in a statement.
In 2018, the judges recognised TikTok as a video-sharing app market challenger. However, they noted that TikTok has since solidified and even strengthened its position despite the emergence of competing services. TikTok claimed to be the strongest competitor to established players in the digital space, but the court rejected that assertion.
The EU imposes certain conditions to categorise a company as a big tech or gatekeeper. These include having over 45 million monthly active users in the EU and more than 10,000 yearly active business users in the bloc. Digital companies with an annual EU turnover of at least 7.5 billion euros or a market value of over 75 billion euros are also affected. Violations can lead to fines of up to 10% of global turnover, rising to 20% for repeat offenders. In severe cases, the EU can order the breakup of companies.
