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Douyin’s Anti-Competitive Lawsuit Against Tencent Moves Forward In Chinese Court

China’s Douyin, the Chinese version of TikTok, is suing fellow internet titan Tencent over allegedly monopolistic behavior.

According to CGTN, the Beijing Intellectual Property Court has accepted Douyin’s case. Douyin has accused Tencent of restricting Douyin video content on Tencent apps such as WeChat and QQ. Douyin is asking the court to order Tencent to cease anti-competitive practices and pay Douyin 90 million yuan, or approximately $13.94 million, in damages.

Douyin claims that Tencent’s WeChat starting imposing restrictions in April 2018 on short video apps such as Douyin and Kuaishou. WeChat eventually loosened its restrictions on Tencent-backed apps such as Kuaishou and Weishi, but kept them in place for Douyin, according to CGTN.

Douyin and TikTok are owned by ByteDance.

Tencent has argued that Douyin’s allegations are “maliciously framed” and that Douyin illegally obtained, through anti-competitive methods, WeChat user information. Douyin has denied Tencent’s claims and asserts that Tencent’s restrictions are intended to hamper competition, CGTN said.

According to the complaint, WeChat has 1.2 billion monthly users, while QQ had 600 million. Douyin has argued that no other providers are able to provide services equivalent to the Tencent apps, which means Tencent holds a “dominant position on the market.”

Chinese antitrust law forbids companies holding dominant market positions from trying to eliminate or restrict competition, according to CGTN.

The lawsuit was originally filed on Feb. 2 in Beijing.

Douyin’s parent company, ByteDance, and Tencent are fierce competitors in China, with their billionaire founders, ByteDance’s Zhang Yiming and Tencent’s Pony Ma, also often at odds.

“We believe that competition is better for consumers and promotes innovation,” a ByteDance spokesperson said, per a Bloomberg report about the suit. “We have filed this lawsuit to protect our rights and those of our users.”

In early February, China’s State Administration for Market Regulation (SAMR) released new antitrust guidelines as part of an effort to rein in Big Tech platforms, Reuters reported.

SAMR said the guidelines are intended to prevent companies from fixing prices, manipulating the market through algorithms, and restricting technologies. It added the guidelines also aim to “stop monopolistic behaviors in the platform economy and protect fair competition in the market,” according to Reuters.

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