Europe launches investigation into TikTok over its rewards program in Spain

The European Commission has launched a new investigation against TikTok after suspecting that the app violates the Digital Markets Act. The highest authorities fear that rewards programimplemented in Spain and France, may cause addiction among young people. The Commission believes that ByteDance did not conduct a risk assessment before launch and therefore opened formal proceedings against the Chinese company.

According to the press release, The Commission asked TikTok to submit a risk assessment report April 17, 2024. The regulator also asked the company to share measures to mitigate possible systemic risks of the reward program. However, Tik Tok ignored and the fight moved to a new levelwhere he may be subject to economic sanctions.

The regulator indicates that TikTok Lite rewards programwhich rewards users with points for watching videos or inviting friends to join the platform, was implemented without prior study. Since the platform is subject to the stricter regime of the Digital Markets Act, the Commission has given it an ultimatum. If TikTok fails to provide a risk assessment report and mitigation mechanisms for its new features by May 3, it faces a fine of 1% of its total annual revenue.

“Given TikTok’s failure to submit the risk assessment that should have been carried out before the launch of TikTok Lite, the Commission suspects a prima facie violation of the Digital Services Act and considers that there is a risk of serious harm to the mental health of users,” the regulator noted.

TikTok could be as toxic and addictive as cigarettes

A few weeks ago, ByteDance launched a rewards system for TikTok in Spain and France. Platform offers points for completing certain actionslike watching the video, subscribe influencers or invite your contacts to join TikTok. These points can be redeemed for Amazon gift cards or coins to send tips, stickers, or any gift to your favorite creators.

At the moment, TikTok faces investigation for encouraging addictive use by minors. In January, the European Commission announced it would review the platform’s algorithms to understand their negative impacts and counter potential risks to physical and mental health. The launch of a rewards program without preliminary evaluation put the application in the crosshairs of the regulator.

“Small streams of short, quick videos may be considered entertainment, but they also put our children at risk of addiction, anxiety, depression, eating disorders and periods of poor attention,” said Thierry Breton, the European Commissioner for Internal Markets and Services. “With our first Digital Services Act case against TikTok still ongoing, the company launched TikTok Lite, which financially rewards additional screen time.”

The European Commissioner stated that TikTok Lite could be as toxic as light cigarettes and warned that they would introduce temporary measures. If the company does not provide convincing evidence of its safety, the European Commission will block the application for the reward and impose a fine.

The regulator stated that will conduct a thorough investigation as a priority. Fines for violating the Digital Markets Act could amount to 6% of TikTok’s global annual turnover.