(Bloomberg) -- The feud between Tencent Holdings Ltd. and aggressively expanding media startup Toutiao is escalating -- via yet another lawsuit.
Douyin, the fast-ascending short video streaming app owned by Toutiao, is suing China’s biggest social media giant for distributing a news clip that accused Douyin of encouraging reckless behavior with children. But Douyin said it wasn’t the source of the video, and that Tencent should bear responsibility for spreading false and damaging information. It’s seeking 1 million yuan ($157,000) in compensation and an apology, according to a court filing posted on Thursday.
Toutiao, which started as a mobile news aggregator that provides a personalized information feed, has grown into one of the biggest threats for Tencent. The lawsuit comes days after the founders of the two companies clashed on social media over issues of copyright infringement. The duo, which have sued each other over alleged intellectual property violations before, are battling for internet users in burgeoning arenas such as news and video.
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In the court filing, Douyin said Tencent disseminated a social media post titled “Douyin, please have mercy on children.” Among other things, the article featured footage of an adult swinging from a rope off a cliff, clutching a child that wasn’t wearing a safety harness or helmet. Douyin wasn’t the origin of the video but -- given the headline of the post -- that caused “harm to its reputation and worsened social opinion,” according to the court filing.
Tencent has removed the social media account that originally posted the news item and videos, adding that any user can flag articles they suspect of defamation, according to a statement posted on its main news portal. It added it would address the lawsuit if it receives official court notices.
Toutiao, officially known as Beijing Bytedance Technology Co., is valued at $20 billion by CB Insights and has become one of the world’s largest media startups. It’s gone on an acquisition binge, buying Musical.ly and photo-editing service Faceu. Tencent, which has lost some of its gloss over the past year to up-and-comers such as Toutiao, is taking steps to try and regain users such as by launching a mini-video service.
Toutiao has so far withstood Tencent’s own attempt to develop a rival mobile-based news business. Its main app had surpassed 270 million active users as of March, more than five times that of Tencent’s equivalent “Tiantian Kuaibao,” according to researcher Analysys.
Toutiao’s rapid growth however has begun to draw scrutiny: regulators told the company to halt downloads of a quartet of apps it owns, and also shuttered its joke-sharing app in an effort to clean up the internet.
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