China Court Accepts ByteDance Monopoly Case Against Tencent
ByteDance and Tencent Legal Battle Amidst Regulatory Shifts
ByteDance is escalating its rivalry with Tencent through legal action, coinciding with increased scrutiny of major internet companies by the Chinese government.
Lawsuit Permitted by Beijing Court
The Beijing Intellectual Property Court has authorized ByteDance’s lawsuit against Tencent to move forward, as confirmed by a ByteDance representative to TechCrunch. ByteDance contends that Tencent’s restrictions placed on Douyin, the Chinese iteration of TikTok, contravene China’s developing anti-monopoly regulations.
Restrictions on Content Sharing
For the past three years, Tencent has prevented Douyin content from being viewed or shared on its prominent social networking platforms, WeChat and QQ. This action, according to Douyin, demonstrably represents “monopolistic behavior” achieved through leveraging market dominance to suppress competition – a practice explicitly prohibited by the proposed anti-monopoly legislation.
“We firmly believe that fostering competition benefits consumers and drives innovation,” stated Douyin. “This legal action is undertaken to safeguard our rights and the rights of our user base.”
Tencent's Response and Counterclaims
Tencent has refuted the accusations, labeling them as false and constituting malicious defamation. The company further alleges that Douyin, with its 600 million daily users, has engaged in illicit and anti-competitive practices to gain access to WeChat user data.
Tencent intends to initiate legal proceedings against ByteDance, citing harm to its platform ecosystem and the rights of its users.
Competition for Market Share
Both ByteDance and Tencent are actively vying for dominance in each other’s core markets. ByteDance launched a chat application designed to challenge Tencent’s stronghold in social networking, while Tencent responded to Douyin’s success by introducing several short-video platforms.
Despite these efforts, neither company has yet managed to significantly disrupt the other’s established position.
Government Intervention and Anti-Monopoly Efforts
There are increasing indications that the Chinese government is prepared to address monopolistic practices within the country’s internet sector, following a period of two decades characterized by relatively lenient regulation.
New Regulations and Recent Cases
In November, China’s top market regulator released the draft of its inaugural anti-monopoly law, prompting a surge in lawsuits and investigations. An antitrust investigation into Alibaba was launched in December, focusing on allegations of forcing vendors into exclusive sales arrangements.
Furthermore, a Beijing court recently imposed a 3 million yuan ($464,000) fine on Vipshop, an online fashion retailer, for engaging in anti-competitive conduct. It is anticipated that further antitrust actions targeting major Chinese internet companies will occur in the coming months.
- ByteDance: Parent company of TikTok and Douyin.
- Tencent: Operator of WeChat and QQ.
- Douyin: The Chinese version of TikTok.
