ByteDance files lawsuit against Tencent in tit-for-tat battle

ByteDance has launched a new lawsuit against its main rival Tencent over alleged monopolistic practices, immediately eliciting a promise of retaliation from China’s largest tech company.

China’s top two social media giants are increasingly in competition as ByteDance’s Douyin, the Chinese version of TikTok, swallows an increasing share of users’ screen time. The well financed start-up is also pushing into new fields where Tencent has long been dominant, such as gaming and payments.

ByteDance’s Douyin unit filed the lawsuit in Beijing on Tuesday, targeting Tencent’s years-long practice of blocking direct sharing of Douyin videos to users in its WeChat and QQ apps.

The suit, which is the latest in a multiyear court battle between the two companies, comes after China’s market regulator drew up landmark antitrust rules for the internet sector last year, launching an unprecedented probe into Alibaba for abusing its market position.

Douyin said Tencent was “without a doubt” abusing its dominant market position, and claimed the practices hurt itself and its users — allegations which Tencent called “groundless and defamatory”.

Douyin is petitioning the court to force Tencent to end the practices and pay Rmb90m ($13.9m) in compensation.

Tencent, in turn, alleged that ByteDance has tried to get its hands on WeChat users’ personal information through “various dubious and improper means”, noting that its practices had already been prohibited by several courts. Douyin called these claims “untrue”.

Tencent added that it would take further legal action “to protect our healthy ecosystem”. The two rivals have launched several cases against each other in recent years over unfair competition, infringements on user data and other perceived slights. 

Angela Zhang, an antitrust expert at the University of Hong Kong, said cases like the latest filed by ByteDance have been difficult for plaintiffs in China to win in the past.

“Now that the policy initiative from Beijing has shifted, ByteDance may want to try its luck,” she said, noting that China’s market regulators were aware of the issues but they lacked the manpower to handle extensive enforcement action.

Chinese regulators are currently probing Alibaba, in addition to their normal reviews of large merger deals, but the central government’s antitrust bureau in Beijing only has about 45 staff, Ms Zhang said.

Tencent has won at least two of its earlier cases against ByteDance. In 2019, a court in the south-west city of Chengdu ruled against ByteDance’s use of WeChat user content. “In conclusion, ByteDance’s behaviour violated business ethics and the principles of honesty and trust, is illegitimate, and may constitute unfair competition,” the court said, ordering the company to stop seizing content from Tencent’s platforms.

ByteDance declined to comment on the case.