Advocate General Biondi: TikTok DMA Gatekeeper Opinion Rejects ByteDance Appeal

• Advocate General Andrea Biondi advised the EU's highest court to reject TikTok's appeal against its Digital Markets Act gatekeeper designation.
• Biondi's non-binding opinion stated that companies must provide "clear and highly compelling" arguments to rebut gatekeeper status.
• He rejected TikTok's claims that bigger rivals or users' use of multiple apps exempted it from the rules.
• The opinion supports the European Commission's swift designation process and its ability to reject unconvincing evidence without extended dialogue.
• Experts believe the opinion sets a high evidentiary bar for future gatekeeper challenges, emphasizing the need for robust initial rebuttals.

The practical implication for companies facing potential European Commission gatekeeper designation is clear: robust, evidence-based rebuttals must be presented at the initial notification stage.

The European Union's highest court recently received a significant recommendation regarding a major technology company's challenge to its regulatory status. Advocate General Andrea Biondi delivered a non-binding opinion to the Court of Justice of the European Union (CJEU), advising against key arguments put forth by ByteDance, the parent company of the popular social media platform TikTok. This opinion is part of an ongoing legal battle where ByteDance seeks to overturn a 2024 General Court judgment that affirmed the European Commission's decision to designate TikTok as a "gatekeeper" under the Digital Markets Act (DMA).

The Digital Markets Act, enacted in 2022, serves as a cornerstone of EU competition law, designed to curb the market power of dominant online platforms. Its primary objective is to prevent these powerful entities from stifling competition or imposing unfair conditions on businesses and users. The legislation establishes specific financial and user thresholds to identify companies that qualify as gatekeepers, subjecting them to a set of upfront obligations, such as prohibitions against self-preferencing their own products or services. TikTok, which launched in Europe in 2018, was officially designated a gatekeeper in September 2023, joining other tech giants like Alphabet, Amazon, Apple, Meta, and Microsoft in facing these stringent new rules.

In his detailed assessment, Advocate General Biondi systematically rejected several core contentions raised by ByteDance. TikTok had argued that its substantial user base and market presence did not fully reflect its competitive landscape, asserting that users frequently engaged with rival applications and that TikTok lacked the extensive, interconnected product ecosystem characteristic of its larger competitors. Furthermore, ByteDance claimed that regulators had imposed an excessively high evidentiary burden, demanding too much proof before agreeing to investigate these nuanced differences in its market position.

However, the Advocate General Biondi TikTok DMA opinion underscored that the mere existence of larger rivals or the use of multiple apps by consumers does not automatically exempt a platform from gatekeeper obligations. He reasoned that TikTok could still represent a crucial channel for businesses to reach specific audiences, even if those users also spent time on other platforms. Crucially, Biondi emphasized that for a company to successfully rebut a gatekeeper presumption, its arguments must be "clear and highly compelling." He acknowledged that companies are not expected to present their entire legal case upfront, but warned that allowing every objection to trigger extensive regulatory investigation would undermine the DMA's intended swift designation process, which operates on a tight 45-working-day deadline. He also concluded that ByteDance was not entitled to additional rounds of commentary simply because the Commission found its initial evidence unconvincing, citing the need to maintain the efficiency of the regulatory timeline.

This Advocate General's opinion carries significant weight for the future enforcement of the Digital Markets Act and sets a precedent for subsequent gatekeeper challenges. Experts in EU competition law view the opinion as highly favorable to the European Commission, reinforcing its approach to rapid designations and its authority to dismiss insufficient rebuttals without prolonged engagement. Jasper van den Boom, an assistant professor at Leiden University, highlighted the importance of speedy designations and the Commission's ability to reject weak arguments, anticipating that the CJEU will likely align with Biondi's recommendations.

The practical implication for companies facing potential European Commission gatekeeper designation is clear: robust, evidence-based rebuttals must be presented at the initial notification stage. Van den Boom advised that companies should proactively furnish compelling evidence demonstrating limited control over users or a marginal market share, rather than merely pointing to larger competitors or reserving such arguments for later court proceedings. The cases of Apple's iMessage and Microsoft's Bing, Edge, and advertising services, which were not designated gatekeepers in February 2024 after the Commission reviewed their rebuttals, illustrate that successful challenges are possible when sufficiently compelling counterarguments are provided. Giorgio Monti, a competition law professor at Tilburg Law School, further suggested that companies can meet this demanding evidentiary hurdle by conducting comprehensive analyses of all relevant market conditions, rather than focusing on isolated points of contention in a designation decision. This CJEU TikTok ruling, once finalized, will solidify the high bar for challenging gatekeeper status under the DMA.

Companies facing potential Digital Markets Act gatekeeper designation must prepare highly compelling, evidence-based rebuttals at the initial notification stage, as the EU court is likely to uphold the Commission's swift designation process and high evidentiary bar for challenging designations.

Source: Original reporting based on a legal analysis.