On Thursday, TikTok entered the fray alongside Meta Platforms (NASDAQ:META) in challenging its “gatekeeper” designation under the Digital Markets Act (DMA), an EU law aimed at enforcing stricter regulations on tech companies and facilitating user mobility across competing services. Meta had previously contested the “gatekeeper” status for its Messenger and Marketplace platforms but did not appeal to Facebook, Instagram, and WhatsApp.
In September, the European Union identified 22 “gatekeeper” services operated by six tech giants, including Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Alphabet’s (NASDAQ:GOOGL) Google, Amazon (NASDAQ:AMZN), Meta, and ByteDance’s TikTok. While Microsoft, Google, and Amazon accepted their designations without appeal, Apple is yet to comment, with the deadline for appeals set for November 16.
TikTok’s appeal centers on the belief that its designation poses a risk to the DMA’s intended goal of protecting established gatekeepers from emerging competitors like TikTok. The video-sharing platform, operational in Europe for just over five years, argues that it is a formidable challenger rather than a gatekeeper, as implied by the DMA. TikTok contends that its parent company ByteDance’s global market capitalization, which influenced the gatekeeper designation, is primarily based on business lines that don’t operate in Europe.
The company asserts that it falls below the DMA’s revenue threshold of €7.5 billion ($8.13 billion) per annum generated in the European Economic Area. According to the DMA, companies with over 45 million monthly active users and a market capitalization of €75 billion are considered gatekeepers providing core platform services.
TikTok further emphasizes that its designation as a gatekeeper is flawed, as it is a challenger, not an incumbent, in digital advertising. The company highlights the absence of a market investigation by the European Commission regarding its designation.
As the battle over “gatekeeper” status unfolds, TikTok’s appeal underscores its commitment to disputing the regulatory classification and positioning itself as a dynamic force in the competitive landscape. The outcome will likely have broader implications for the application and interpretation of the DMA within the tech industry.
Featured Image: Unsplash @ Solen Feyissa