TikTok-owner ByteDance has filed a lawsuit against Chinese Internet giant Tencent for barring content from Douyin on its platforms.
On 2 February ByteDance officially filed a lawsuit against Tencent at the Beijing Intellectual Property Court (北京知识产权法院), alleging that Tencent’s restrictions on the sharing of Douyin (the Chinese counterpart to TikTok) content by users of the WeChat and QQ platforms is in breach of China’s “Anti-Trust Law” (反垄断法).
ByteDance claims that such conduct by Tencent breaches the Anti-Trust Law’s provisions on “monopoly conduct the abuses market allocation positions, and excludes or restricts competition.” It has requested that the court order Tencent to immediately cease such behaviour, as well as provide 90 million yuan in compensation to ByteDance for economic damages.
Tencent’s WeChat and QQ instant messaging platforms have monthly active users of over 1.2 billion and 600 billion respectively. ByteDance said that this has made them “foundational applications” with the largest number of Internet users in China, as well as the highest penetration and usage rates.
According to ByteDance the sharing function of instant messaging services as well as their network effects mean that users cannot migrate en masse. Because there are currently no other operators on the Chinese market that provide services on the same level as WeChat and QQ, ByteDance says that Tencent possesses “market allocation position.”
Tencent said in a statement that it “abides by fair competition and the concepts of open cooperation in providing its services to users and third party products.”
“ByteDance’s accusations are purely fabricated, and are a form of malicious framing,” said Tencent.
According to a report from China Securities Journal Tencent also said that “many of ByteDance’s products including Douyin have employed various forms of unfair competition to breach the law and obtain the personal information of WeChat users and violate platform regulations.
“[ByteDance] has already received multiple orders from courts of law demanding that it immediately cease such infringements.”
Tencent also said that ByteDance and associated companies have engaged in “multiple forms of illegal and irregular conduct that violates the platform ecosystem and the rights and interests of users.”
The filing of the lawsuit comes amidst the Chinese government’s stepping up of anti-trust measures to deal with the immense power of China’s Internet and fintech giants.
Both Alibaba and Tencent were hit with penalties by the State Administration for Market Regulation (SAMR) in early December for breaches of the anti-trust law, while Chinese regulators launched an anti-trust probe into Alibaba towards the end of the same month.
On 20 January the Chinese central bank issued new anti-trust measures that would empower it to break up third-party payments platforms.
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