EC Launches Action Against TikTok Lite, May Suspend Reward Program

Two formal proceedings against TikTok demonstrate the EU's priority for protecting minors online under the Digital Services Act, EC officials said Monday during a briefing. TikTok, which the EC designated a Very Large Online Platform under the DSA, must submit a risk assessment report, including mitigation measures for potential systemic risks, before launching apps that are likely to affect those risks, the EC noted. In February, it opened a first DSA noncompliance case against the Chinese company that owns TikTok to gauge whether it breached the law in areas linked to protection of minors, advertising transparency, data access for researchers and risk management of addictive design and harmful content; that probe continues. On Monday, it filed a second proceeding, this one to determine whether the company violated the act when it launched TikTok Lite in France and Spain in March. The issue, EC officials said, is that TikTok Lite creates a financial incentive for users, particularly minors and vulnerable people, to spend extra time on the site. An EC request for an explanation of what TikTok was doing before it launched the app went unanswered, and the required risk assessment wasn't filed. The platform has until today (April 23) to provide the risk assessment and until May 3 to send additional information requested. TikTok's reward program appears to amount to prima facie infringement of the DSA and a threat to users' mental health, the EC said. The "task and reward" system lets users earn points as they view more content, invite friends and like content, for example. After accumulating points, they can convert them into vouchers. The system is designed to keep users on the service as long as possible, EC officials said. The EC ordered TikTok to suspend the Lite rewards program in the EU. The suspension, which could take place as early as Thursday, will go into effect if warranted after the company has had 48 hours to exercise its right of defense under the DSA. The two proceedings are the first to take advantage of enforcement tools available under the DSA, officials noted. DSA authorities in France, Spain and Ireland conducted the investigation. Ireland is TikTok's European headquarters. The penalty for failure to respond to the EC request for information is up to 1% of total annual income; the fine for failing to suspend TikTok Lite is up to 6% of total annual income. "We are disappointed with this decision," emailed a TikTok spokesperson. "The TikTok Lite rewards hub is not available to under 18s, and there is a daily limit on video watch tasks." The company will continue talks with the EC, the spokesperson added.