On Wednesday, TikTok announced the suspension of a contentious rewards program in the European Union that has sparked increasing concern among EU regulators.
This program, part of TikTok Lite—which is a version of the main TikTok app that uses less data—offers cash incentives to users for their engagement with content and features within the app.
The decision to halt this program came after the European Commission indicated on Monday that it might enforce fines and demand a compulsory cessation of the program due to fears that it promotes addictive behavior by incentivizing users to spend more time on the platform.
TikTok stated, “In an effort to maintain a constructive relationship with the EU Commission and other regulatory bodies, we are voluntarily pausing the rewards functions in TikTok Lite to address their concerns.” This was shared in a post on X.
The European Commission’s warnings to TikTok are part of its newly gained regulatory powers under the Digital Services Act (DSA), a recently implemented law that oversees online platforms within the EU. Earlier in the week, as part of an investigation into TikTok Lite, the Commission expressed concerns that TikTok had not provided essential documentation, including a risk assessment and a report detailing measures taken to mitigate those risks.
Non-compliance with these requests could lead to fines amounting to up to 1% of TikTok’s global annual revenue, with additional “periodic penalties” potentially reaching up to 5% of the company’s average daily revenue. Further fines up to 6% of TikTok’s global revenue could be imposed if the TikTok Lite feature is found to breach the DSA.
Meanwhile, this suspension in Europe coincides with significant challenges for TikTok in the United States. President Joe Biden recently signed legislation that could result in a nationwide ban on TikTok. This was part of a broader foreign aid package passed by Congress, supporting nations like Israel and Ukraine. Under the new U.S. law, TikTok must secure a new owner within a set timeframe or face a complete prohibition in the United States.
