China antitrust: Beijing court accepts ByteDance’s US$14 million lawsuit against Tencent, starts proceedings

A lawsuit filed by TikTok parent ByteDance against Tencent Holdings over alleged monopoly practices has been accepted by a court in Beijing, a move that experts said could become a “landmark” case as authorities ramp up antitrust efforts.

ByteDance says Tencent was restricting access to content from Douyin, the domestic version of TikTok, on its WeChat and QQ messaging platforms, and abusing its dominant position in the market. While Douyin had 600 million daily active users as of August last year, WeChat had more than 1.1 billion monthly active users worldwide as of January, the vast majority of them in China.

The Beijing Intellectual Property Court started proceedings on Sunday, a ByteDance representative said. The company is seeking 90 million yuan (US$14 million) in compensation.

China’s internet giants have fought several legal battles over monopolistic practices over the years. In fact, ByteDance sued Tencent over the Douyin link restriction in 2019 as well. But its latest lawsuit is the first case since Beijing started tightening antitrust regulations on its “platform economy” late last year.

Moreover, on Sunday, market regulators released new antitrust guidelines highlighting a range of unacceptable behaviours. These include forcing online marketplace merchants to choose one from two platforms, and the use of data and algorithms to analyse users and set different prices for the same deal.

Tencent was not immediately available for comment, but last week, when the case was filed, it said that it “provided services for users and third-party products under the concept of fair competition and open collaboration”. It said ByteDance’s allegations were untrue and malicious slander, and vowed to countersue, alleging that ByteDance had damaged its platform ecosystem and breached its users’ rights.

“If the judiciary accepts the filing [by ByteDance] and sets it for trial, it could become a landmark case,” Zhai Wei, executive director of the Competition Law Research Center of East China University of Political Science and Law, said in an interview last week.

Few plaintiffs have won similar cases and the new ByteDance-Tencent case could take years.

It could take a couple of years or even more, depending on the complexity of the case, said Angela Zhang, director of the Centre for Chinese Law at the University of Hong Kong. “It is hard to predict the outcome at this stage. The parties might even settle their case. But in the past, few plaintiffs have successfully won an abuse of dominance case in China,” she said.

ByteDance’s 2019 lawsuit against Tencent, for instance, has progressed slowly. A court in Fuzhou that accepted the case then said in December last year that it should be handed over to a court in Shenzhen, where Tencent is based.