Last year, the European Commission designated TikTok as a Very Large Online Platform under the Digital Services Act.
TikTok Lite is a new app which has been launched in France and Spain and is aimed at users aged 18+. It includes the “Task and Reward Program”, which allows users to earn points while performing certain “tasks” on TikTok, such as watching videos, liking content, following creators, inviting friends to join TikTok, etc. These points can be exchanged for rewards, such as Amazon vouchers, gift cards via PayPal or TikTok’s coins currency that can be spent on tipping creators.
The Commission has now opened formal proceedings against TikTok under the Digital Services Act to assess if it breached the DSA when launching TikTok Lite. Under the DSA, designated Very Large Online Platforms must submit a risk assessment report, including measures to mitigate any potential systemic risks, before launching any new functionalities that are likely to have a critical impact on their systemic risks.
The Commission is concerned that the “Task and Reward Program” has been launched without prior diligent assessment of any risks it involves, especially any which may have an addictive effect. The Commission also questions if it was launched without taking effective risk mitigating measures. The Commission says that this is of particular concern for children, given the suspected absence of effective age verification mechanisms on TikTok. It is already investigating the lack of effective age verification mechanisms and the suspected addictive design of the platforms.
This investigation will focus on TikTok’s compliance with the DSA obligation to conduct and submit a risk assessment report before deploying functionalities, in this case the “Task and Reward Lite” program, that are likely to have a critical impact on systemic risks; and the measures taken by TikTok to mitigate those risks. If Tiktok has not carried out these requirements, they will have infringed Articles 34 and 35 of the DSA. The Commission will now carry out an in-depth investigation as a matter of priority. The opening of formal proceedings does not prejudge its outcome.
In addition, the Commission has also sent TikTok a formal request for information, based on a Commission decision, requiring a reply to its request for information of 17 April 2024. In particular, the Commission had requested TikTok to provide by 18 April the risk assessment report for TikTok Lite, as well as information about the measures the platform has put in place to mitigate potential systemic risks of these new functionalities. TikTok failed to provide such document within the deadline. TikTok had until 23 April to submit the risk assessment report to the Commission and until 3 May to provide the other information requested.
If TikTok fails to reply to the Commission’s request for information by decision within the specified deadlines, the Commission may impose fines up to 1% of Tiktok’s total annual income or worldwide turnover and periodic penalties up to 5% of its average daily income or worldwide annual turnover.
Finally, given TikTok’s inability to submit the risk assessment which should have been carried out before launching TikTok Lite, the Commission suspects a prima facie infringement of the DSA and considers that there are risks of serious damage for the mental health of users. Therefore, it intends to impose interim measures consisting of the suspension of the TikTok Lite rewards programme in the EU pending the assessment of its safety. It could be renewed if necessary and proportionate. Before formally adopting the suspension, TikTok was able to provide arguments to the Commission by 24 April which the Commission says it will carefully assess. The Commission may take further enforcement steps, such as interim measures, and non-compliance decisions. It may also accept any commitment made by TikTok to remedy the issues.
