TikTok has followed Meta’s lead in challenging the “gatekeeper” status attributed to them under the EU’s Digital Markets Act (DMA), a legislation imposing stricter regulations on tech companies and facilitating user transitions between competing services.
While Meta contested the “gatekeeper” designations for its Messenger and Marketplace platforms on Wednesday, it did not appeal against the status for Facebook, Instagram, and WhatsApp. TikTok has now joined Meta in seeking a review of its gatekeeper designation.
In September, the European Union identified 22 “gatekeeper” services operated by six major tech firms: Microsoft, Apple, Google (Alphabet), Amazon, Meta, and ByteDance’s TikTok. Microsoft, Google, and Amazon accepted their designations without challenge, and Apple is yet to disclose its stance before the appeal deadline on November 16.
TikTok’s appeal is founded on the argument that its gatekeeper designation poses a risk to the DMA’s intended objective by protecting established gatekeepers from emerging competitors like TikTok. The video-sharing platform, operational in Europe for just over five years, contends that it is a robust contender against more entrenched platform businesses.
TikTok disputes its gatekeeper classification, stating that it falls short of the DMA’s revenue threshold of 7.5 billion euros ($8.13 billion) annually in the European Economic Area. According to the DMA, companies with over 45 million monthly active users and a market capitalization of 75 billion euros are considered gatekeepers providing a core platform service.
The company argues that its designation as a gatekeeper is primarily based on ByteDance’s global market capitalization, which relies heavily on business lines not even operating in Europe. Last month, ByteDance repurchased shares from U.S. employees, valuing the company at $223.5 billion.
With over 134 million monthly users, TikTok asserts itself as a challenger, not an incumbent, in digital advertising. The company questions the lack of a market investigation related to its gatekeeper designation by the European Commission.
This move by TikTok and Meta reflects the tech industry’s pushback against the DMA’s regulatory measures, setting the stage for potential adjustments to the legislation.
