Whereas the U.S. Authorities has accepted the TikTok sell-off invoice, the corporate can also be dealing with new challenges in Europe, with EU officers lately launching an investigation into TikTok’s newest initiative, which sees customers in some areas getting paid primarily based on how a lot they use the app.
Now, in response to that probe, TikTok has introduced that it’s shutting down its “TikTok Lite” rewards program, which may see if face sanctions for violating the EU Digital Providers Act (D.S.A.).
As reported by Reuters:
“TikTok will voluntarily droop its new app TikTok Lite’s reward program whereas it tries to resolve EU issues, the corporate stated on X social media platform on Wednesday.”
As you’ll be able to see on this instance, TikTok’s rewards program allocates factors to customers primarily based on actions undertaken within the app. The explainers right here (in French) inform customers that they will earn factors by discovering and liking movies within the app.
EU officers have raised issues that the scheme may contribute to app habit, particularly amongst youthful customers, by incentivizing them to make use of the app extra typically. As such, all applications that might enhance systemic dangers are required to be submitted to EU officers for evaluation earlier than implementation.
As a result of TikTok failed to take action, it may now be dealing with fines, with EU officers capable of implement penalties of as much as 6% of an organization’s international income for violations.
Which is why TikTok has rapidly shut down this system, as it really works with EU officers to handle their issues.
It appears unlikely that TikTok will probably be hit with vital fines because of this initiative, however on the similar time, EU investigators will probably be seeking to make an instance of the case, as a reminder of the brand new D.S.A. laws.
And it’s one other headache for the corporate, which, other than the sell-off push in America, can also be coping with a slowdown in customers, and low curiosity in its ongoing buying push.
It’s actually bought its share of points to take care of, and it’ll be attention-grabbing to see whether or not TikTok is penalized for this system, and what the penalty may be.
