ByteDance's Douyin sues Tencent alleging monopolistic behaviour

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BEIJING (Reuters) - ByteDance's short video app Douyin is suing Tencent Holdings in a Beijing court for monopolistic behaviour, intensifying an ongoing feud between the two Chinese technology giants.

ByteDance said on Tuesday it was filing a complaint against Tencent for restricting users from sharing Douyin content on its instant messaging apps WeChat and QQ, which should be prohibited by anti-monopoly law.

It has asked the court to order Tencent to desist with such restrictions, ByteDance said. Douyin is the Chinese version of ByteDance's popular short video app, TikTok.

"We believe that competition is better for consumers and promotes innovation," Douyin said in a statement. It asked Tencent to pay it 90 million yuan ($13.95 million) in compensation in its complaint.

"We have filed a lawsuit to protect our rights and those of our users."

Tencent said in a statement it had not received relevant materials pertaining to Douyin's complaint and described ByteDance's allegations as "false" and "malicious."

"Many ByteDance-developed products, including Douyin, illegally obtain WeChat users' personal information," Tencent said in a statement, adding: "We'll continue to file lawsuits" against ByteDance.

In response to Tencent's remarks, Douyin said in its offcial WeChat account that WeChat has "blocked" Douyin for three years and Tencent's accusation of Douyin illegally obtaining WeChat users' data is untrue.

"We believe users have absolute control over their own data," Douyin said. "User data shouldn't become Tencent's 'private property.'"

ByteDance competes with Tencent in social media in China and has challenged Tencent previously. In 2018, it sued Tencent for anti-competitive behaviour, alleging Tencent's social platform QQ zone and its Guanjia software blocked ByteDance's news aggregator Toutiao's links. Tencent filed a lawsuit accusing ByteDance of defamation around the same time.

Douyin's lawsuit comes as Chinese regulators step up oversight of tech giants. Beijing issued draft rules in November aimed at preventing monopolistic behaviour by internet firms, marking China's first serious regulatory move against the sector.

In December, Tencent-backed China Literature was fined 500,000 yuan, the maximum under a 2008 anti-monopoly law, for not reporting past deals properly for anti-trust reviews.

In the same month, China's market regulator said it was probing a merger between Tencent-backed live game-streaming companies Douyu International Holdings and Huya Inc.

($1 = 6.4536 Chinese yuan renminbi)

(Reporting by Yingzhi Yang in Beijing, Brenda Goh in Shanghai, Pei Li in Hong Kong; editing by Ed Osmond, Jason Neely and Bernadette Baum)