ByteDance’s Douyin launched a lawsuit against Tencent Holdings alleging that its WeChat and QQ platforms are in violation of China’s antitrust laws, Bloomberg reported on Tuesday (Feb. 2).
Tencent prevents users from sharing Douyin content on its instant messaging apps WeChat and QQ, which ByteDance said should be prohibited by anti-competition laws. Douyin is a Chinese version of ByteDance’s TikTok.
The 90 million yuan ($14 million) complaint, which was filed Tuesday (Feb. 2) in Beijing, alleges that Tencent ignored antitrust laws when it blocked access to content from Douyin. ByteDance and Tencent are in fierce competition in China. Their billionaire founders — Zhang Yiming at ByteDance and Pony Ma at Tencent — have also had conflicts in the past.
“We believe that competition is better for consumers and promotes innovation,” a ByteDance spokesperson said, per Bloomberg. “We have filed this lawsuit to protect our rights and those of our users.”
On one of its official WeChat public accounts, Tencent said ByteDance’s allegations are “untrue” and “malicious slander.” Tencent also said it hadn’t yet received anything about the lawsuit and vowed to countersue, according to a report in the South China Morning Post (SCMP).
Tencent alleges that ByteDance damaged its ecosystem and violated user rights. ByteDance denied rumors that Douyin was also blocking links to WeChat and QQ.
Bytedance said that it blocks finance links and healthcare content to WeChat and QQ because of suspected scams and illegal sales tactics.
“This type of action [to block rivals from an internet platform] is quite common in the industry. There isn’t a law to forbid it,” Ge Jia, an independent internet analyst, told SCMP.
ByteDance is the world’s largest tech startup, and has seen its valuation soar over the past two years. The Beijing-based startup was valued at $78 billion in 2018, and in November of 2020 its valuation jumped to $180 billion.
In December, China’s State Administration for Market Regulation announced that it was reviewing a merger between DouYu and Huya for a game-streaming site similar to Amazon’s Twitch.
Chinese regulators have upped oversight of the tech industry, issuing new laws intended to curb antitrust activities and tighten FinTech acceleration. The new draft regulations closely followed the government’s halting of Jack Ma’s planned Ant IPO.
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