While the U.S. Government has approved the TikTok sell-off bill, the company is also facing new challenges in Europe, with EU officials recently launching an investigation into TikTok’s latest initiative, which sees users in some regions getting paid based on how much they use the app.
Now, in response to that probe, TikTok has announced that it’s shutting down its “TikTok Lite” rewards program, which could see if face sanctions for violating the EU Digital Services Act (D.S.A.).
As reported by Reuters:
“TikTok will voluntarily suspend its new app TikTok Lite’s reward program while it tries to resolve EU concerns, the company said on X social media platform on Wednesday.”
As you can see in this example, TikTok’s rewards program allocates points to users based on actions undertaken in the app. The explainers here (in French) inform users that they can earn points by discovering and liking videos in the app.
EU officials have raised concerns that the scheme could contribute to app addiction, especially among younger users, by incentivizing them to use the app more often. As such, all programs that could increase systemic risks are required to be submitted to EU officials for assessment before implementation.
Because TikTok failed to do so, it could now be facing fines, with EU officials able to implement penalties of up to 6% of a company’s global revenue for violations.
Which is why TikTok has quickly shut down the program, as it works with EU officials to address their concerns.
It seems unlikely that TikTok will be hit with significant fines as a result of this initiative, but at the same time, EU investigators will be looking to make an example of the case, as a reminder of the new D.S.A. regulations.
And it’s another headache for the company, which, aside from the sell-off push in America, is also dealing with a slowdown in users, and low interest in its ongoing shopping push.
It’s certainly got its share of issues to deal with, and it’ll be interesting to see whether TikTok is penalized for the program, and what the penalty might be.