Whereas the US authorities permitted a invoice to promote TikTok, the corporate is dealing with new challenges in Europe, with EU officers just lately launching an investigation into TikTok’s newest initiative, which noticed customers in some areas being paid based mostly on how a lot they use. App
Now, in response to that investigation, TikTok has introduced that it’s shutting down its “TikTok Lite” rewards program, which may see it face sanctions for violating the EU Digital Companies Act (DSA).
As reported by Reuters:
“TikTok will voluntarily droop its rewards program for its new app TikTok Lite whereas it tries to resolve EU issues, the corporate mentioned on Wednesday on the X social media platform.”
As you’ll be able to see on this instance, TikTok’s rewards program assigns factors to customers based mostly on actions taken within the app. This is the explainer (in French). Let customers know they will earn factors by discovering and liking movies within the app.
EU officers have expressed concern that the scheme may contribute to app dependancy, notably amongst youthful customers, by encouraging them to make use of apps extra steadily. As such, all applications that will enhance systemic threat should be submitted to EU officers for analysis earlier than implementation.
As a result of TikTok failed to take action, it may now face fines, with EU officers in a position to implement the fines. as much as 6% of an organization’s worldwide income for infringement.
That is why TikTok shortly shut down this system, as it really works with EU officers to deal with their issues.
The initiative doesn’t seem to end in important fines for TikTok, however on the similar time, EU investigators will wish to make an instance of the case as a reminder of the brand new DSA regulation.
And that is one other headache for the corporate, which, along with the shock of gross sales in America, can be coping with a slowdown in customers and fewer curiosity in its ongoing procuring push.
It definitely has had its share of points to cope with, and it is going to be attention-grabbing to see if TikTok is punished for this system and what the punishment is likely to be.
