This photograph taken on March 7, 2024 in Nantes, shows the logo of Chinese social media platform TikTok.LOIC VENANCE/AFP via Getty Images
On Wednesday, July 17, the European Union's General Court determined that ByteDance, the owner of TikTok, cannot sidestep the EU's stringent regulations targeting digital giants. AP News reported that the court found that TikTok falls under the scope of the new Digital Markets Act (DMA), which also applies to tech behemoths like Apple, Google, and Microsoft.
The ruling came after ByteDance's legal challenge against being labeled as an online "gatekeeper" was rejected.
The DMA, which came into effect earlier this year, aims to curb the dominance of major tech companies and promote fairer competition online by imposing additional obligations on these gatekeepers.
ByteDance specifically argued that TikTok should not be categorized as a "gatekeeper" under the Digital Markets Act, suggesting it is a new and competitive player in social media, challenging established giants like Facebook and Instagram (Meta).
However, the court disagreed with ByteDance's argument. The court observed that TikTok has rapidly and massively increased its number of users since 2018, thereby consolidating and strengthening its position in the market.
This growth and market dominance were key factors in the court's decision to classify TikTok under the regulatory framework for digital gatekeepers.
"We are disappointed with this decision," ByteDance stated, in response to court decision.
The DMA, effective since March, outlines a series of mandates for big tech companies, including prohibitions and requirements designed to increase consumer choices and enhance market fairness. The act also includes severe penalties for non-compliance, aiming to ensure that large digital firms adhere to the new regulations.
According to VCPost, Apple has already been set as an example for tech giants as it becomes the first violator of DMA with a potential $38 billion fine.
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