Out-Law / Your Daily Need-To-Know

Out-Law News 2 min. read

EU court rejects TikTok’s interim digital markets ‘gatekeeper’ appeal

TikTok logo displayed on a smartphone

Photo by NurPhoto via Getty Images

A request by TikTok for suspension of its designation as a ‘gatekeeper’ under the Digital Markets Act (DMA) has been rejected by the EU General Court.

The General Court dismissed an application by Bytedance, the parent company of TikTok, for an interim order because it could not prove that it needed it urgently to prevent “serious and irreparable damage”. This means that TikTok will have to comply with the DMA rules that are set to go into effect in March.

TikTok's designation as a gatekeeper under the DMA means that it will have to make significant changes for its EU users, including allowing third-party businesses access to its services and obtaining consent for personalised advertising.

Bytedance, a Chinese holding company that does not operate businesses itself and was founded in 2012, runs the well-known entertainment platform TikTok through its regional affiliates. On 5 September 2023, the Commission used the Digital Markets Act to declare Bytedance a “gatekeeper"; a firm with a platform so influential that it is subject to ex ante regulation. Bytedance appealed to the General Court on 16 November 2023 against the Commission’s designation decision and, several days later, it separately applied to the General Court for interim measures to suspend the operation of the Commission’s designation decision pending the outcome of the substantive appeal.

Bytedance claimed in its request for interim measures that the Commission's decision would put its highly strategic information about how it profiles TikTok's users at risk of exposure, which could greatly damage its business.

Nonetheless, the head of the General Court said that Bytedance did not show a real risk of sharing secret information or that this risk would cause “serious and irreparable harm.”

“The main proceedings, where Bytedance will seek to annul the Commission’s designation decision,  are not affected by the General Court's decision on interim measures.” said competition law expert Tadeusz Gielas of Pinsent Masons.

The court is to deliver a final judgment on the substance of the case at a later date. Bytedance has the option to appeal against the decision of the President of the General Court within two months and ten days of notification of the decision, limited to points of law only.

Mathias Greupner, competition law specialist of Pinsent Masons added: “The rejection of Bytedance's request for interim measures is a significant development in the ongoing legal battle between the company and the European Commission. The final resolution of this case will have implications for the regulatory oversight of digital platforms within the EU.”

Gielas said that the General Court’s judgment also provides useful guidance by explaining that “there is nothing to prevent” a gatekeeper from taking “appropriate measures” to explain to end users the “possible advantages that they might draw from the cross-use or combined use of their data”. 

“This suggests that gatekeepers may take appropriate steps to seek to persuade end-users to give consent under Article 5(2) of the DMA relating to their personal data.  It will be interesting to see how this approach develops in future DMA decisional practice, in particular what measures will be considered “appropriate” in this context,” Gielas said.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.