TikTok owner ByteDance sues Tencent over alleged monopolistic practices, WeChat owner vows to countersue

Coco Feng
·4-min read

TikTok owner ByteDance sued Tencent Holdings on Tuesday, alleging that its Shenzhen-based rival was violating Chinese antitrust laws by blocking access to content from Douyin, the domestic version of TikTok.

ByteDance is seeking 90 million yuan (US$14 million) in compensation for what the company said is Tencent’s practice of blocking links to Douyin on the WeChat and QQ messaging platforms.

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

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Tencent said on one of its official WeChat public accounts that it did not receive documents regarding the lawsuit, adding that ByteDance’s allegations are “untrue” and “malicious slander.” Tencent also vowed to countersue its rival, alleging ByteDance has damaged its platform ecosystem and violated user rights.

The episode is the latest in an ongoing spat between the two Chinese entertainment giants.

Yesterday, ByteDance pushed back against rumours that Douyin was also blocking links to WeChat and QQ, alleging that the reports were a coordinated campaign targeting the platform.

However, the Beijing-based tech giant clarified that it does block links to WeChat and QQ for finance- and health care-related content creators, citing a high risk of scams and illegal sales tactics on third-party platforms.

ByteDance says Douyin is more social because of stifling WeChat policies

Finance videos, including those on economics and wealth management, are one of the most popular types of content on Douyin. As of last November, 100 million users had engaged with such content and 29 million content creators were producing it, the Post reported last month, citing an anonymous source close to the company.

“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,” said Ge Jia, an independent internet analyst who has followed the industry for more than two decades.

Douyin, the Chinese version of TikTok operated by ByteDance, said on Monday that it would not allow influencers who produced such content to redirect their followers to other platforms like Tencent’s WeChat and its messaging app QQ.

“There are high risks if financial and medical care creators introduce their followers to external platforms. Some would sell courses, illegally endorse certain stocks [for individual investors] or conduct medical consultations on WeChat or QQ, which may damage users’ property and personal safety,” Douyin said in a message posted on its official Weibo page.

The policy does not affect other influencers outside finance and health care, who are still free to include contact information, including their WeChat account details, on their Douyin profile, the company said.

The Douyin statement was issued in response to rumours circulating Monday that said the short video app was trying to block Tencent from its platform. Some users were told by Douyin to clean up “irrelevant” contact information, according to a report by local tech media Leiphone, which has since deleted the article.

TikTok owner ByteDance set to challenge Alipay, WeChat Pay

ByteDance has previously complained about WeChat’s policy of banning links, including those from Douyin and its Feishu cloud office suite.

In 2019, ByteDance sued Tencent over the ban but there has been little progress in the case. In December 2020, a court in Fuzhou city, which initially handled the law suit, said it should be transferred to the court in Shenzhen where Tencent is based.

Douyin had attracted 600 million daily active users by August 2020 and is seeking to add more social features and games, seen as encroaching on the home turf of Tencent, which is China’s biggest gaming company. WeChat, the do-all app used by most netizens in China, also launched its own short video feature last year.

ByteDance is also expanding into health care, relaunching its online health care apps under the new Xiaohe platform late last year. On Monday it rolled out Xiaohe Yidian, a medical encyclopaedia that is similar to a product Tencent has been operating.

This is not the first time Douyin has blocked other apps. Starting in October 2020 the platform banned links to third-party websites like Alibaba Group Holding’s Taobao and JD.com on its live-streaming channels, as the company ramped up its own efforts in e-commerce. (Alibaba is the owner of the South China Morning Post.)

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