The EU’s war on Big Tech just got a second front

ByteDance’s video-sharing app TikTok went before Europe’s highest court on Tuesday, trying to overturn rules that force it to follow stricter regulations meant to limit the influence of major technology companies.

The hearing at the EU Court of Justice marks the first time a company has challenged its classification under the bloc’s Digital Markets Act.

How the judges decide could shape whether European regulators succeed in their push to break up tech monopolies and give users more options.

European officials labeled TikTok a “gatekeeper” in September 2023, putting it in the same category as other tech giants with over 45 million users each month.

The list includes Google, owned by Alphabet (NASDAQ: GOOG), along with Meta Platforms (NASDAQ: META), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Booking.com (NASDAQ: BKNG). A year later, a lower court rejected TikTok’s initial complaint, ruling the company clearly fit the requirements for the gatekeeper label.

As reported by Cryptopolitan previously, Apple also made a similar move against DMA, arguing the regulation hurts security and makes things harder for customers.

Companies that fall under these rules face strict obligations designed to reduce their market power. Breaking the rules can cost them fines reaching up to 10% of what they make in a year.

Tiktok says it doesn’t fit the standards

TikTok’s legal team told the court the earlier tribunal made mistakes when it decided the platform met all three tests for gatekeeper status, like having major market influence, serving as an essential channel for businesses to reach customers, and maintaining a dominant position that’s hard to challenge.

“ByteDance showed not only that its market cap is overwhelmingly derived from its Asian businesses but also they had no connection to Europe, face different competitive dynamics and operate in a distinct regulatory, linguistic and cultural environment,” Bill Batchelor, representing TikTok, told the court.

Batchelor explained to the 15 judges that between 70% and 80% of people who use TikTok also use several other platforms at the same time, including Facebook and Instagram from Meta Platforms, plus Snap and X. This means users aren’t stuck with just TikTok, he argued.

“We refer to this as ‘multihoming.’ That means businesses can reach the same end users via multiple other platforms,” Batchelor said.

A lawyer working for the European Commission pushed back against TikTok’s reasoning.

“Lock-in can occur even when some degree of multihoming exists. For example, there may be specific user groups that depend on TikTok,” Mislav Mataija argued before the judges.

The court’s decision will come sometime in the next few months. Meta Platforms is also fighting its gatekeeper classification for its Messenger and Marketplace services.

Europe targets features that hook young users

European regulators are stepping up pressure on social platforms and plan to take action against design choices on TikTok and Instagram that they say get kids addicted.

Governments around the world are trying to shield children from social media’s negative effects.

EU Commission President Ursula von der Leyen announced Tuesday at the European Summit on Artificial Intelligence and Children in Denmark that action against certain platform features would happen later this year.

“We are taking action against TikTok and its addictive design – endless scrolling, autoplay, and push notifications. The same applies to Meta, because we believe Instagram and Facebook are failing to enforce their own minimum age of 13,” von der Leyen said.

“We are investigating platforms that allow children to go down ‘rabbit holes’ of harmful content – such as videos that promote eating disorders or self-harm,” she added.

The EU has built its own age-checking application that von der Leyen called having “the highest privacy standards in the world.” Member countries will be able to add it to their digital wallets soon, making it easy for online platforms to use it. “No more excuses – the technology for age-verification is available,” the EU chief said.

A formal legal proposal could be ready by summer, once the EU’s Special Panel of experts on Child Safety Online finishes its work.

European enforcement of rules holding tech giants accountable has ramped up over the past year, resulting in penalties that have annoyed American officials who warn Europe might lose out on opportunities in artificial intelligence.

U.S. President Donald Trump is fighting back against penalties hitting American businesses, which have added up to more than $7 billion in the past two years.

Trump signed a memorandum in February looking at possible tariffs to “combat digital service taxes (DSTs), fines, practices, and policies that foreign governments levy on American companies.”

Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.