• Ernie Diaz

East Side Story

Tencent has been rumbling upstart content gang Bytedance for years. Pony Ma and his crew basically ran China’s social media rackets, until video clips burst into vogue. Tencent’s WeChat and Bytedance’s Douyin were star-crossed lovers, the former sharing the latter’s video content. When Pony separated the two, the companies went to court.

That’s where the fights go down, in literally hundreds of lawsuits, most recently over Douyin using Tencent -copyrighted music. Now they’re squaring off in an epic antitrust suit that may bring down some regulatory heat neither gang will walk away from in one piece.

“Monopolistic practices are how social platforms consolidate and grow, on both sides of the Pacific,” says Edward Lehman. “What may surprise people is that the Chinese government seems to be more fervent about curbing these monopolies than America’s, for the good of China’s tech sector as a whole.”

Thus the high stakes in this scrap. The last antitrust case of this nature was when Qihoo (“Qi who?” Exactly.) sued Tencent back in 2010, and lost.

“It’s tough for regulators to define the markets in which these companies operate,” Lehman says. “But when they crackdown, the new rules are likely to be strict enough that both companies will wish they had never gone to court.”

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