EU opens second formal probe of TikTok under the Digital Services Act

In case TikTok fails to reply to the Commission within the indicated deadlines, the Commission may impose fines up to 1% of the provider's total annual income or worldwide turnover and periodic penalties up to 5 % of the provider's average daily income or worldwide annual turnover.

By  Storyboard18Apr 23, 2024 8:17 AM
EU opens second formal probe of TikTok under the Digital Services Act
The European Union has opened a second formal investigation into TikTok, suspecting the platform of breaking the Digital Services Act (DSA). It has raised a red flag over the TikTok Lite app as it investigates concerns the app poses mental health risks to users.

On April 22, the European Union opened a second formal proceedings against TikTok under the Digital Services Act (DSA). The probe is to assess whether the company may have breached the DSA when launching TikTok Lite in France and Spain. Under the DSA, designated Very Large Online Platforms are obliged to submit a risk assessment report, including measures to mitigate any potential systemic risks, prior to 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” of TikTok Lite, 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. - has been launched without prior diligent assessment of the risks it entails, in particular those related to the addictive effect of the platforms, and without taking effective risk mitigating measures. The EU commission said this is of particular concern for children, given the suspected absence of effective age verification mechanisms on TikTok. The lack of effective age verification mechanisms and the suspected addictive design of the platforms are already under investigation in the first formal proceedings against TikTok.

This investigation will thus focus on the following areas: TikTok's compliance with the DSA obligation to conduct and submit a risk assessment report prior to deploying functionalities, in this case the “Task and Reward Lite” program, that are likely to have a critical impact on systemic risks. In particular negative effects on mental health, including minors' mental health, especially as a result of the new feature stimulating addictive behavior. The measures taken by TikTok to mitigate those risks.

If proven, these failures would constitute infringements of Articles 34 and 35 of the DSA.

In addition, the Commission has also sent TikTok a formal request for information, compelling the company to provide 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 now has until 23 April to submit the risk assessment report to the Commission and until 3 May to provide the other information requested.

In case TikTok fails to reply to the Commission's request for information by decision within the indicated deadlines, the Commission may impose fines up to 1% of the provider's total annual income or worldwide turnover and periodic penalties up to 5 % of the provider's average daily income or worldwide annual turnover.

Finally, given TikTok's inability to submit the risk assessment which should have been carried out prior to 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.

The Commission has therefore also communicated to TikTok its intention to impose interim measures consisting in 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 has been given until 24 April to bring arguments in its defense which the Commission will carefully assess.

Next Steps

The opening of formal proceedings empowers the Commission to take further enforcement steps, such as interim measures, and non-compliance decisions. The Commission is also empowered to accept any commitment made by TikTok to remedy on the matters subject to the proceeding.

The opening of formal proceedings relieves Digital Services Coordinators, or any other competent authority of EU Member States, of their powers to supervise and enforce the DSA in relation to the suspected infringements.

Background

The Commission designated TikTok as a Very Large Online Platform under the Digital Services Act on 25 April 2023 based on TikTok's userbase that reaches the threshold of 45 million average active users in the EU. Since the end of August 2023, TikTok has been subject to the comply with the obligations under the Digital Services Act.

TikTok Lite is a new app with a functionality aimed at users aged 18+ referred to as 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. TikTok Lite was launched in France and Spain in the last month.

Under the DSA, designated Very Large Online Platforms are obliged to submit a risk assessment report, including measures to mitigate any potential systemic risks, prior to launching any new functionalities that are likely to have a critical impact on their systemic risks.

In February 2024, the Commission opened a first formal proceedings against TikTok to assess whether TikTok may have breached the DSA in areas linked to the protection of minors, advertising transparency, data access for researchers, as well as the risk management of addictive design and harmful content. The investigation is ongoing.

Two other formal proceedings are currently open under the Digital Services Act: one against X and one against AliExpress.

Since 17 February, the Digital Services Act applies to all online intermediaries in the EU.

First Published on Apr 23, 2024 8:17 AM

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