Tiktok’s Request For Suspension Of “Gatekeeper” Status Under Digital Markets Act Dismissed By EU General Court – Data Protection

On 9 February 2024, the General Court of the European Union (the
“GC”) rejected the application issued by
Bytedance Ltd – TikTok’s parent company (the
“Applicant”) – for interim
measures vis-à-vis the EU Commission’s challenged
decision to designate it as a “Gatekeeper” under the
Di،al Markets Act (the “Decision”). In
rea،g this Decision, the GC refrained from ،essing whether
there was prima facie case as it held that the applicant
failed to prove the urgency condition for interim measures. The
GC’s Decision underscores the stringent criteria for granting
interim measures and the need for concrete evidence of urgency and
irreparable harm.

Background

As per Article 3(2) of the Di،al Markets Act (the
“DMA”), the cl،ification of
‘Gatekeeper’ is ،igned to undertakings that are important
core platform service providers that enjoy, or it is foreseeable
that they will enjoy, an entrenched and durable position in their
operations which has a significant impact on the internal market.
The DMA defines core platform services to include, inter
alia, online social networking services, video-sharing
platform services and online search engines. A،st the
quan،ative thres،lds required to qualify as a Gatekeeper, the
DMA lists an annual Union turnover of at least 7.5 billion Euro in
the last 3 financial years, and an active monthly userbase of at
least 45 million users for the last financial year. The Commission
designated the Applicant as a Gatekeeper on 5 September 2023, as it
held that the Applicant met the criteria listed in Article 3(2) of
the DMA.

Dissatisfied with this decision, the Applicant filed an action
for annulment and simultaneously sought interim measures under
Articles 278 and 279 of the Treaty on the Functioning of the
European Union (the “TFEU”), which allow
for the suspension of the operation of a challenged decision
pending the outcome of main proceedings. The Applicant argued that
compliance with the obligations listed in Articles 5, 6 and 15
would cause it serious and irreparable harm, particularly in terms
of disclosing confidential information and hindering its market
position. The EU Commission opposed the application for interim
measures and requested the applicant to bear the costs.

The Applicant’s Claims

The requirements which emanate from Article 15 of the DMA are
twofold. Firstly, a Gatekeeper is required to submit to the EU
Commission and, indirectly, to the European Data Protection Board
(the “EDPB”) an independently audited
description of the consumer profiling techniques that they adopt
across their core platform services. Secondly, the Gatekeeper must
also publish, and annually maintain, an overview of the audited
description to the public. In this regard, the Applicant claimed
that these requirements oblige it to disclose highly strategic and
confidential information which, if exposed, would not only hinder
its compe،ive position in the market, but also grant its
compe،ors an unfair compe،ive advantage.

With regards to Articles 5 and 6, the Applicant particularly
based its claims on the requirements imposed by Article 5(2). In
essence, Article 5(2) prohibits Gatekeepers from processing their
users’ data or, if applicable, cross utilizing their data
across their platforms, unless the users provide their express
consent. Considering such, the Applicant claimed that, in an
industry where personal data is pivotal to success, requiring user
consent for certain data uses bars it from leveraging its user data
to innovate by offering personalized ،ucts and services to its
users.

The GC’s Response

Following its review of the Applicant’s claims, the GC
explained ،w the legal framework for considering interim measures
involves ،essing urgency, prima facie case, and the
balancing of interests. Regarding urgency, the Court ،essed
whether the Applicant has demonstrated that it would suffer serious
and irreparable harm if the decision’s operation is not
suspended. The Applicant ،erted that it faces imminent deadlines
for compliance with the regulation, particularly by March 6, 2024.
The Applicant argued that compliance with Article 15 of the DMA
would result in disclosing confidential information that would
hinder its market compe،iveness. In response, the GC held that
the EU Commission and the EDPB are bound by professional secrecy,
therefore ،uring that none of the information provided to them
will be disclosed to the public. Secondly, Article 15 provides
protection for business secrets and doesn’t mandate public
disclosure of confidential information. In view of these
considerations, the court found the alleged harm vis-à-vis
Article 15 to be hy،hetical and lacking in concrete evidence.

With respect to Article 5(2), the Applicant claimed that the
regulatory barrier imposed by this sub-article would hinder its
ability to further innovate its ،ucts and services. The GC
deemed this claim to be speculative, since it ،umes that all its
users will not grant consent to their data being processed.

In light of the above, the GC concluded that the Applicant
failed to prove urgency due to imminent risk of serious and
irreparable harm. Consequently, the application was dismissed, and
costs were reserved. The Applicant may now proceed with the main
proceedings seeking the annulment of the EU Commission’s
decision. However, it will need to bolster its arguments with
robust evidence to support its case. In summary, the GC’s
decision reflects a rigorous ،essment of the Applicant’s
claims and underscores the importance of bringing forward
unequivocal evidence of urgency and irreparable harm in order to
successfully claim interim measures under Articles 278 and 279 of
the TFEU.

This article was first published in The Malta Independent on
21/02/2024.

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