Yesterday, the EU issued TikTok an ultimatum. The Chinese-owned social media app was given just 24 hours to outline the mental health risks related to its new app TikTok Lite or face huge daily fines.

This is the EU’s second probe into TikTok under the Digital Service Act (DSA). The DSA is a new law to protect users from harmful or illegal online content. It requires large platforms like TikTok to submit a risk assessment before launching any major new features.

The EU’s latest gripe with the Chinese-owned company is over TikTok Lite. The barebones version of the regular app was launched in France and Spain in March. TikTok Lite is designed to run on slower internet connections and use less memory.

“The Commission is concerned that TikTok did not submit a risk assessment of the new TikTok Lite,” said EU digital chief Margrethe Vestager.

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TikTok Lite allows adult users to earn points under a so-called “Reward Program.” The more you view and engage with content on the app, the more points you can earn. You can then exchange these points for rewards, such as Amazon vouchers or PayPal gift cards.  

This new feature “financially rewards extra screen time,” said EU commissioner Thierry Breton. 

“Endless streams of short and fast-paced videos could be seen as fun, but also expose our children to risks of addiction, anxiety, depression, eating disorders, and low attention spans,” he warned.

The clock is ticking

TikTok now has until the end of today (April 23) to submit the risk assessment report to the Commission. If TikTok fails to reply on time, the EU executive body could issue a penalty worth up to 1% of the company’s total annual income. It could also impose periodic penalties up to 5% of TikTok’s average daily income.

“We are disappointed with this decision,” TikTok said in a statement. “The TikTok Lite rewards hub is not available to under 18s, and there is a daily limit on video watch tasks. We will continue discussions with the Commission.”

TikTok faces mounting scrutiny from regulators across the world over concerns ranging from national security to data privacy. In the US, the House of Representatives recently voted to ban the social media app unless it breaks ties with its parent company ByteDance. 

But TikTok won’t go down quietly, and ByteDance has no plans to divest the company. It is instead prepping for a long legal battle in the US, the Financial Times reports.

“This legislation is a clear violation of the First Amendment rights of TikTok’s 170mn American users,” Michael Beckerman, TikTok’s public policy head in the US, said in an internal memo to staff shared with FT. “We’ll continue to fight.” 

However, in the EU, a ban on TikTok is highly unlikely. As Matej Šimalčík, the executive director of the Central European Institute of Asian Studies, previously told TNW, the Commission’s approach to technology issues doesn’t usually involve outlawing things. Instead, it focuses on “investigating specific legal breaches and sanctioning them.” 

In February 2024, the Commission opened its first formal proceedings against TikTok to assess whether the company breached the DSA. The investigation is ongoing.

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