TikTok requests that Europe's highest court eliminate its gatekeeper designation.

      The Grand Chamber of the CJEU heard ByteDance’s appeal in Case C-627/24 P on Tuesday, marking the first challenge to the DMA gatekeeper designation to reach the highest court in the EU. ByteDance’s TikTok is making one last effort to overturn its classification as a “gatekeeper” under the Digital Markets Act, a designation the company has contested since the European Commission imposed it in September 2023.

      This hearing in Case C-627/24 P is the inaugural DMA gatekeeper appeal brought before the EU's supreme court. A ruling from the General Court in July 2024 rejected ByteDance's initial challenge, confirming that TikTok satisfied all three criteria for the designation: substantial market impact, its role as a significant business gateway between companies and consumers, and a strong, persistent position in that capacity.

      ByteDance lodged an appeal in September 2024, and the hearing on Tuesday revisited those initial findings. TikTok's legal counsel argued that the General Court made errors regarding each of the three criteria. The company maintains that it acts as a challenger instead of an established player, that its business users have alternative options, and that its market position is neither dominant nor sustainable as the DMA stipulates.

      If successful, this appeal would not invalidate the DMA but could remove TikTok from its provisions, complicating Brussels’ efforts to uniformly apply the same regulations to the six identified gatekeepers. The Commission's attorney, Mislav Mataija, refuted these claims, stating, “Lock-in can occur even when some degree of multihoming exists,” and noted that certain user groups might rely on TikTok.

      The Commission stands firm that the criteria have been met, that the General Court applied them accurately, and that ByteDance is asking the Court of Justice to replace the lower court's factual assessment, which is not the purpose of a legal appeal.

      TikTok was designated a gatekeeper along with Alphabet, Amazon, Apple, Meta, and Microsoft on September 5, 2023, joining the six platforms governed by the DMA. This designation entails various obligations, including requirements for interoperability, restrictions on self-preferencing, and limitations on the integration of user data across different services. Non-compliance can result in fines of up to 10% of global revenue, increasing to 20% for repeat violations.

      The implications of this case extend beyond TikTok itself. The DMA represents the first significant initiative in any major jurisdiction to regulate large digital platforms proactively rather than through specific competition enforcement actions, and its legitimacy partly relies on the courts endorsing the designations. A reversal by the Court of Justice would not be disastrous but would compel the Commission to revisit its analysis under stricter judicial oversight, potentially providing other gatekeepers with grounds to challenge their own designations more vigorously.

      The case is being heard by the Grand Chamber, which is reserved for matters of significant importance or institutional relevance. The hearing was streamed with a delay on the court's website, and a judgment is anticipated in the coming months, though no specific date has been announced.

      Meanwhile, ByteDance continues to invest in Europe, including a €12 billion commitment announced last year related to data-centre infrastructure as part of its Project Clover initiative. This investment is expected to proceed regardless of the outcome of the appeal, as evidenced by the DMA obligations, which may also persist alongside it.