TikTok faces a large fine and the suspension of its Lite rewards programme after the European Union launched a probe into whether the Chinese-owned social media app breached new laws aimed at clamping down on big tech.
Overnight, the EU's executive arm, the European Commission opened formal proceedings against TikTok under the new Digital Services Act (DSA) to assess the rewards programme launched in France and Spain.
TikTok and its owner ByteDance have until today to submit a risk assessment report and until 3 May to provide other information, otherwise, it faces fines of up to 1% of worldwide turnover and periodic penalties up to 5% of average annual revenue.
Concerns were noted by the Commission about the potential effects on mental health for adults and children from the addictive nature of the platform, especially with TikTok Lite's task and reward program, which allows users to earn points while performing certain 'tasks' on the platform such as watching videos, liking content, following creators and inviting friends to join.
The EC in-depth investigation will examine TikTok's compliance with the laws, "especially as a result of the new feature stimulating addictive behaviour", and what measures have been taken to mitigate those risks.
Given TikTok's inability to submit the risk assessment, which the EC said should have been carried out before launching TikTok Lite, the EC said it already "suspects a prima facie infringement of the DSA and considers that there are risks of serious damage for the mental health of users".
Therefore the commission had told TikTok that it will suspend the Lite rewards programme in the EU until a safety assessment is complete, with the platform given until Wednesday 24 April to offer its defence.