Douyin files complaint against Tencent

On February 2, Bytedance’s video app Douyin (Chinese version of Tiktok) officially complained to Beijing IP Court against Tencent’s monopolistic practices. The case attracted much attention both in China and abroad, being a first antimonopoly complaint in the internet industry since the release of Draft Antitrust Guidelines for Platform Economy (to solicit public opinion).

Douyin asked to cease unlawful behavior and compensate the Company’s economic losses in amount of 900 mil RMB (≈USD 13.9 mil), claiming that Tencent had set restrictions of sharing Douyin’s content through its instant messaging services WeChat and QQ.

According to Douyin, WeChat and QQ have 1,200 mil and 600 mil MAUs respectively, which are not likely to switch to another messaging platform, as today no one on Chinese market is able to provide instant communication service of such quality. That means that Tencent has a dominant market position, and blocking Douyin’s videos and links constitutes an abuse of dominance to restrict or eliminate market competition.

In the evening of the same day, Tencent replied that it provided its services to users and third parties with respect to the principles of fair competition, openness and cooperation and addressed such accusations as ‘deliberately false’. The tech company claimed that in fact Bytedance’s apps had been obtaining personal data of WeChat users by means of unfair competition – by doing so, it damaged the platform’s environment and violated users’ interests despite continuous restriction orders of Chinese courts. Tencent expressed its determination to continue to file relevant complaints.

In return, Douyin stated that the said blockings by WeChat had started as early as three years ago. Tencent then had excused itself by ‘fixing short video broadcasting’, but at the exact same time had launched a dozen of its own video apps. Regarding personal data, Douyin claimed that users possess absolute and totally controllable right over their data, and such information should not become a “private asset” of Tencent.

“As for now, we have no example of a case on violation of AML in the Internet industry, where a claimant won. So we cannot say whether Douyin may win. But there is no doubt that producing the evidence will cause large expenses, and the lawsuit will take a lot of time”, a Special Research Fellow of National Strategy Institute of Qinghua University Mr.Liu Xu commented. ъ

Douyin is not the only Bytedance’s app to suffer WeChat restrictions. A social messaging app Duoshan was released in 2019 and enjoyed over 1 million downloads in first 24 hours on the market but then, having its links blocked by WeChat, managed to keep only 16% of its users. Mobile office suite Feishu was also banned out from WeChat mini programs with its Feishu Conference, Feishu Documents etc.