ByteDance Files $14 Million Suit Against Tencent for Monopolistic Behavior

Douyin, the Chinese version of ByteDance’s TikTok short video app, has filed suit in Beijing against rival Tencent Holdings for alleged monopolistic behavior, seeking $13.9 million in compensation, ByteDance said Tuesday.

Tencent prohibits the sharing of Douyin content on its extremely popular apps WeChat and QQ, a practice that ByteDance hopes the court will rule runs counter to China’s anti-monopoly law and must cease.

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

Tencent said early Tuesday that it has not yet received any materials related to the suit but called the allegations “groundless and defamatory.” It told Bloomberg that it offers services to users and third-party products “under the principles of fair competition and open collaboration.”

The lawsuit is the latest move in an ongoing spat between the two tech companies, and comes at a time when China is increasing its regulation of the country’s major tech players for potentially monopolistic behavior.

Chinese authorities took a first key step in this direction in November when they implemented new draft regulations on the issue. In December, the State Administration of Market Regulation launched an anti-trust investigation into tech giant Alibaba.

Bad blood between competitors ByteDance and Tencent goes back years and has grown as each increasingly make moves into the other’s historic turf. ByteDance has chipped away at Tencent’s supremacy in social media and gaming, and last month launched its own digital payment platform that will butt heads with WeChat Pay. Its Douyin app had 600 million daily active users as of last August.

Recently, Tencent has also pushed back into ByteDance’s turf by launching its own short-video streaming feature within its ubiquitous WeChat app, which has over 1 billion users and is nearly indispensable for daily life and business in China.

In 2018, ByteDance sued Tencent for allegedly blocking its news aggregator app Toutiao’s links on certain platforms. Shortly after, Tencent sued ByteDance back over a separate claim of defamation. The latest suit, however, marks the first time that ByteDance has tried the tack of suing Tencent for monopolistic practices.

This week, ByteDance denied rumors that it has itself been blocking links to Tencent’s WeChat and QQ apps from Douyin, but admitted that it was indeed blocking links to WeChat and QQ user content related to finance and healthcare, popular content categories which it said had a higher risk of scams. In October, it started banning links to third-party sales platforms like Alibaba’s eBay-esque Taobao, a move that coincides with its own expansion into e-commerce.

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