A European Union court on Wednesday dismissed a lawsuit by ByteDance, owner of video-sharing platform TikTok, against the EU’s decision to list the company as a digital “gatekeeper.”

The Digital Markets Act regulates the behaviour of gatekeepers, meaning companies that hold powerful, entrenched positions in the EU’s digital economy, acting as intermediaries between many users and businesses.

The commission designated ByteDance as a gatekeeper in September 2023; the company took legal action in November.

The EU General Court in Luxembourg ruled that the commission’s label was warranted because ByteDance exceeded the relevant thresholds, such as global market value and the number of EU users.

The court rejected ByteDance’s arguments that its global market value mainly came from China.

The court said that the combination of ByteDance’s global value and its large number of users in the EU reflected its financial capacity and its ability to monetize those EU users.

Judges also rejected ByteDance’s claim that TikTok does not benefit from “network effects,’’ where the expansion of a platform’s user base in turn draws in yet more users.

The court found that TikTok had increased its EU user base exponentially since its EU launch in 2018.

The court also rejected ByteDance’s claim that TikTok is a market challenger to the established players, such as Google-owner Alphabet and Meta, which owns Facebook and Instagram.

The judges said that while this was true in 2018, since then the platform had consolidated and strengthened its position, in spite of the launch of new, competing services by Meta and Alphabet.

According to the Court of Justice, ByteDance has two months and 10 days to appeal the decision in the EU’s top court.

(dpa/NAN)