TikTok risks fines as EU issues ultimatum over app launch

The EU launched a probe into TikTok's spinoff Lite app and threatened to suspend an ‘addictive’ feature on it rewarding users for watching and liking videos, amid child-safety concerns, a European Commission official told AFP. The European Commission has concerns about the "risks of serious damage for the mental health of users", including minors, from the rewards programme, the official said. TikTok Lite arrived in France and Spain in March. — AFP

The European Union opened a new probe Monday into whether ByteDance Ltd violated the bloc’s new content law when it launched its TikTok Lite app in France and Spain without providing a full risk assessment.

The new app promises to pay users through a points system, which the European Commission said risks creating an addictive effect on users.

The company was given 24 hours to deliver a risk assessment to the commission or risk fines of up to 1% of its total annual income or worldwide turnover, or periodic penalties of up to 5% of its average daily income.

The new demand under the Digital Services Act is a follow-up to a request sent last week by the bloc’s executive arm for information regarding the launch of TikTok Lite.

TikTok now has until May 3 to respond to other questions about the measures put in place for the protection of minors and the mental health of users, in particular around the potential stimulation of addictive behavior.

The commission has described TikTok Lite as "a new app with a new functionality aimed at users aged 18+” and with a "Reward Program” that allows users to earn points by carrying out tasks including watching videos, which can then be exchanged for rewards such as Amazon vouchers, gift cards or TikTok’s coins currency.

EU regulators previously announced a formal investigation into TikTok under the bloc’s Digital Services Act over the app’s addictive design and screen time limits, its privacy settings, and the social media platform’s age verification procedures. The rules allow regulators to impose maximum fines of as much as 6% of annual sales, or ban repeat offenders from the EU.

TikTok is already facing increased pressure on the other side of the Atlantic. The US House of Representatives on Saturday put legislation requiring the app’s Chinese parent company to divest its ownership stake on a fast track to become law, with the Senate expected to vote on the bill in the coming days.

Online platforms and search engines with over 45 million users in the EU must comply with the most stringent rules of the DSA, with 22 currently falling under the designation including Alphabet Inc products like Google Search and Youtube, Meta Platforms Inc.’s Facebook and Instagram, and Microsoft Corp’s LinkedIn. – Bloomberg

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