Whereas the U.S. Authorities has approved the TikTok sell-off bill, the corporate can also be dealing with new challenges in Europe, with E.U. officers just lately launching an investigation into TikTok’s newest initiative, which sees customers in some areas getting paid based mostly on how a lot they use the app.
Now, in response to that probe, TikTok has announced that it’s shutting down its “TikTok Lite” rewards program, which may see if face sanctions for violating the E.U. Digital Companies Act (D.S.A.).
As reported by Reuters:
“TikTok will voluntarily suspend its new app TikTok Lite’s reward program while it tries to resolve EU concerns, the company said on X social media platform on Wednesday.”
As you may see on this instance, TikTok’s rewards program allocates factors to customers based mostly on actions undertaken within the app. The explainers right here (in French) inform customers that they’ll earn factors by discovering and liking movies within the app.
E.U. 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 packages that would improve systemic dangers are required to be submitted to E.U. officers for evaluation earlier than implementation.
As a result of TikTok failed to take action, it may now be dealing with fines, with E.U. 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 E.U. officers to deal with their issues.
It appears unlikely that TikTok will likely be hit with vital fines because of this initiative, however on the similar time, E.U. investigators will likely be trying to make an instance of the case, as a reminder of the brand new D.S.A. rules.
And it’s one other headache for the corporate, which, apart from the sell-off push in America, can also be coping with a slowdown in users, and low curiosity in its ongoing procuring push.
It’s definitely acquired its share of points to cope with, and it’ll be attention-grabbing to see whether or not TikTok is penalized for this system, and what the penalty may be.
