TikTok’s underdog pitch falls flat with EU court adviser

An EU court adviser rejected key arguments in TikTok’s bid to escape gatekeeper rules, finding bigger rivals and users’ other apps did not put it beyond the law’s reach.(CN) — Having bigger rivals does not put TikTok beyond Europe’s Big Tech rulebook, an adviser to the bloc’s highest court concluded Thursday.ByteDance, TikTok’s parent company, is asking the Court of Justice of the European Union to overturn a 2024 judgment and scrap the European Commission’s decision designating it a gatekeeper under the Digital Markets Act. The commission wants the appeal dismissed.Europe adopted the law in 2022 to keep powerful platforms from shutting out competitors and dictating how businesses reach customers. It imposed upfront obligations, including restrictions on favoring platforms’ own products. Financial and user thresholds help regulators identify which companies belong under those rules.TikTok launched in Europe in 2018. By September 2023, the commission had designated ByteDance a gatekeeper alongside Alphabet, Amazon, Apple, Meta and Microsoft. ByteDance challenged that decision, lost in the General Court in July 2024 and appealed. The higher court heard arguments in May.ByteDance argued TikTok’s size didn’t tell the whole story: Users also visited competing apps, and the service lacked the sprawling network of connected products rivals could use to keep customers close. It said regulators had demanded too much evidence before agreeing to investigate those differences.Advocate General Andrea Biondi recommended rejecting the challenges he examined. His nonbinding opinion addressed selected issues at the court’s request, rather than the entire appeal.“In that setting, a presumption can be manifestly called into question only if the logic of the rebutting argument is clear and highly compelling,” Biondi wrote. He explained companies did not have to prove their entire case upfront, but raising doubts would force regulators to investigate virtually every objection, defeating the fast designation process.He also rejected the idea that using several apps necessarily freed users from dependence on any one of them. TikTok could remain an important way for businesses to reach particular audiences even when those people spent time elsewhere.Biondi concluded ByteDance did not have a right to another round of comments simply because the commission found its evidence unconvincing. Requiring regulators to circulate every assessment could derail the law’s 45-working-day deadline.“The opinion is very favorable to the Commission,” said Jasper van den Boom, an assistant professor of EU competition law at Leiden University. He supported both speedy designations and regulators’ ability to reject weak rebuttals without repeatedly inviting companies to respond.Van den Boom advised companies to bring evidence of limited control over users or marginal market share, rather than simply pointing to bigger competitors. He said they needed that evidence with their initial notification, not saved for court. He expected judges to follow the opinion, giving the commission greater confidence in future designations.Apple and Microsoft showed the thresholds were not an automatic ticket into regulation. After examining their rebuttals, the commission concluded in February 2024 that Apple’s iMessage and Microsoft’s Bing, Edge and advertising service did not qualify. Both companies remained gatekeepers for other services.Biondi likewise placed a limit on regulators: When a company submitted sufficiently compelling counterarguments, the commission had to investigate further unless the evidence already justified leaving it undesignated.Giorgio Monti, a professor of competition law at Tilburg Law School, said companies could clear the demanding hurdle by analyzing all relevant market conditions rather than picking apart individual points in a designation decision.But he saw a gap in the guidance. “The opinion leaves open the precise concept of what a gatekeeper is: It is clear that the gatekeeper need not hold a monopoly, but what degree of market power suffices remains to be clarified,” Monti said.TikTok did not respond to a request for comment; the commission declined to comment.TikTok’s designation remains in place while judges consider the appeal. They can reject Biondi’s advice and, if they overturn the lower ruling, decide the case themselves or send it back. Their appeal judgment will not be open to another appeal.Courthouse News reporter Eunseo Hong is based in the Netherlands.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads