TikTok and the Digital Markets Act | Bytedance Denied Interim Relief

27 May 2024

Bytedance Ltd, the multinational company behind the social media app TikTok, recently sought and was denied interim relief to suspend the European Commission’s decision designating it as a gatekeeper under the Digital Markets Act (DMA).

Seán Hurley BL discusses the details of the case, the strict standards for interim relief and the need for detailed evidence to support applications.

Interim relief before the General Court: Bytedance Ltd unsuccessful in seeking relief

Case T-1077/23 R Bytedance Ltd v European Commission ECLI:EU:T:2024:94 (9 Feburary 2024) offers a recent illustration of the criteria that must be met for the General Court to grant interim relief pursuant to Articles 278 and 279 TFEU.

The application for interim relief arose in the context of annulment proceedings being brought by Bytedance Ltd following the Commission designating Bytedance as a gatekeeper pursuant to Article 3 of Regulation (EU) 2022/1925, the Digital Markets Act (‘DMA’).

Interim relief: an exceptional circumstance for TikTok?

Bytedance Ltd sought interim relief suspending the operation of the Commission decision until the main decision was issued. Bytedance Ltd was particularly concerned to suspend the application of Articles 5 and 6 DMA which imposed a prohibition on the cross-use of personal data of users across services by the gatekeeper in the absence of a user’s consent.

Bytedance Ltd also sought to suspend the application of Article 15 DMA which required it to provide an independently audited description of any customer profiling techniques it used on its TikTok Service to the European Data Protection Board.

In interpreting Articles 278 and 279, the General Court clarified it would grant interim measures suspending the effect of a Commission acts in exceptional circumstances only.

Article 156(4) of the Rules of Procedure of the General Court provide an application for interim relief should state:

  • The subject matter of the proceedings;
  • The circumstances giving rise to the urgency; and
  • Law establishing a prima facie case for the interim measure applied for.

The General Court affirmed that it retained “broad discretion” whether to grant interim measures or not. It equated urgency with a situation where “irreparable harm” would result to the applicant’s interests if the relief was not granted.

The General Court ultimately declined to grant Bytedance Ltd the interim reliefs it sought.

Person using TikTok on their phone

TikTok’s Obligations under the Digital Markets Act Article 15

The Court rejected Bytedance Ltd’s argument that failing to suspend its Article 15 DMA obligations requiring it to disclose its profiling practices would cause it significant competitive harm in circumstances where rivals were not obliged to disclose this information.

The Court held Bytedance Ltd had failed to make out a prima facie case and laid emphasis on the fact that Article 15 did not require a public disclosure of this data but was limited to providing the information to the European Data Protection Board. In respect of Article 15(3), the Court emphasised it was Bytedance Ltd itself that prepared the public overview of the disclosure and it was entitled to take account of its need to protect business secrets and other confidential information.

In relation to Bytedance Ltd’s submission that ultimately the Commission would have discretion to decide which parts of the overview are confidential, the Court described this as “speculative and hypothetical at this stage” and was accordingly insufficient to demonstrate the urgency of the application.

The Court observed Bytedance Ltd’s claim lacked specific details, including detailed documentation, which would show the consequences that would probably ensue if the interim relief was not granted.

The Court stated:

The applicant merely relies on abstract references to confidential information without specifying the nature, content, value and relevance thereof from the point of view of competition, having regard in particular to the fact that some of its competitors are subject to the same disclosure obligations.[1]

The Court also said Bytedance Ltd had not demonstrated that serious and irreparable harm was probable or imminent which was required by case-law (see Spain Commission, T‑826/14 R, EU:T:2015:126).

An “Existential” Impact on TikTok’s Business?

Bytedance Ltd contended Articles 5 and 6 DMA in effect prevented it from using its TikTok platform to innovate and offer new features and products. This was described as having a significant and “potentially existential” impact on TikTok’s business.

The premise of Bytedance Ltd’s claim, that the operation of these provisions would have a detrimental impact on its ability to create new features, was based on the assumption that Bytedance Ltd would be required to obtain the consent of users to rely on their data pursuant to Article 5(2) DMA and that the new feature must be regarded as an “other service” which is “provided separately” for the purposes of Article 5(2)(b) or (c).

The Court held that Bytedance Ltd had failed to substantiate these arguments. It was unclear from Bytedance Ltd’s submissions the extent to which it intended to rely on personal data to create new features and Bytedance Ltd was also opaque on the extent to which the use of personal data would constitute the “cross-use” of personal data under Article 5(2)(c) DMA.[1] It was also held that even if even if it was the case Bytedance Ltd required user consent, it had not adequately demonstrated users’ would fail to give consent. For example, users could be informed of “the possible advantages that they might draw from the cross-use or combined use of their data…”.[2]

Conclusion and Implications for Future Regulatory Compliance

A key-takeway from this decision, is that any application for interim relief before the General Court must be precisely pleaded and appropriate evidence must be adduced to demonstrate the irreparable damage that will occur if relief is not granted.

At a broader level, the case is instructive as it illustrates the rigorous approach the General Court will take to any arguments by applicants which are subject to regulatory obligations under the DMA.

Considering the cross-over between the DMA, the Digital Services Act, the Data Act and the GDPR, it is important that regulators and regulated entities alike keep abreast of the emerging jurisprudence on the interpretations of the respective Acts.

[1] Paragraph 33.

[2] Paragraph 46.

[3] Paragraph 47.

Seán Hurley BL formerly worked as a Senior Regulatory Lawyer at the Data Protection Commission and is currently a practising barrister specialising in EU law. The views expressed above are the author’s own and do not reflect the views of The Bar of Ireland.

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