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TikTok and Meta Challenge EU’s “Gatekeeper” Status Under Digital Markets Act

TikTok

TikTok has joined Meta in contesting the “gatekeeper” status assigned under the European Union’s Digital Markets Act (DMA). This law, which introduces more stringent regulations for tech giants, aims to facilitate easier user migration between competing services.

TikTok, owned by ByteDance, has voiced concerns that its designation as a “gatekeeper” might hinder the DMA’s objectives by safeguarding established companies against emerging competitors like itself. “Our appeal is based on the belief that our designation risks undermining the DMA’s own stated goal by protecting actual gatekeepers from newer competitors like TikTok,” the company stated. TikTok argues that, with its five-year presence in Europe and over 134 million monthly users, it remains a challenger in the digital advertising space rather than an incumbent.

Meta, on its part, has appealed against the “gatekeeper” status for its Messenger and Marketplace platforms. However, it has not contested the designation for its other major platforms, including Facebook, Instagram, and WhatsApp.

The EU identified 22 services as “gatekeepers” in September, involving six tech companies – Microsoft, Apple, Google, Amazon, Meta, and ByteDance’s TikTok. Among these, Microsoft, Google, and Amazon have not challenged their status. Apple, meanwhile, has yet to disclose its course of action, with the deadline for appeal set for November 16.

The DMA criteria for “gatekeeper” designation include having more than 45 million monthly active users and a market capitalization exceeding 75 billion euros. TikTok contends that it does not meet the DMA’s revenue threshold in the European Economic Area, pegged at 7.5 billion euros annually. The company attributes its gatekeeper status to ByteDance’s global market capitalization, which is primarily based on business lines not operational in Europe.

This legal tussle comes as the EU’s DMA seeks to ensure that tech giants operate in a fair and transparent manner. The Act mandates interoperability of software and services with competitors, data portability for users, and clarity in algorithmic processes, among other requirements. Violations of these regulations could result in fines up to 20 per cent of the company’s worldwide turnover and other punitive measures.

The Court of Justice of the European Union has confirmed receiving four legal complaints against the DMA’s gatekeeper designations, two from Apple and one each from Meta and TikTok. These appeals represent a critical juncture in the ongoing dialogue between major tech companies and regulatory bodies over market competition and consumer rights.

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