European Commission initiates its first formal investigation under the DSA against Tiktok

What is the Digital Services Act?

A while ago, we published a blog post on the DSA containing all the necessary background information. In brief, with the implementation of the DSA, the EU wants to create a clear and strict regulatory framework for social media, marketplaces, and search engines. The DSA aims to ensure transparency, equality, and respect for the basic rights of EU citizens and businesses, as well as fight against illegal content. For example, the Act governs how online actors must deal with illegal and harmful content. The DSA also imposes transparency obligations and introduces strict rules for the protection of minors on social media. It prohibits targeted advertisements based on “sensitive” data such as religious beliefs or political preferences and even prohibits targeted advertising to minors in general.

The stricter rules specifically target the largest tech companies. The EC put forward a list of 17 “very large online platforms” and identified 2 “very large online search engines” to which these stricter rules are addressed. TikTok is on this list, together with the usual suspects, such as Amazon, Apple, Google, Meta, Booking.com, Zalando, and Microsoft (as they own LinkedIn). The full list can be consulted by following this link. Some DSA provisions addressed to these companies have already entered into force early last summer.

The investigation against TikTok

Since this autumn, the EC has been conducting informal investigations against many companies on the list of major players. For example, requests for information have been sent to TikTok four times in recent months, requesting the company to explain certain aspects of its operation to the EC.

The recent announcement that the EC launched a formal investigation against TikTok is the result of that preliminary investigation.

According to Thierry Breton, the European Commissioner for Internal Market, the investigation will focus on possible violations by TikTok in relation to transparency and protection of minors. For example, the EC suspects that TikTok uses algorithms specifically aimed at keeping people on their platform longer and even creating an addictive effect. The longer TikTok can keep users on its platform, the more ads it can show and, therefore, the more revenue it generates. These subliminal techniques through which we are kept on the app longer (than necessary) are sometimes referred to as the “rabbit hole effect”. In addition, questions arise as to age verification and standard privacy settings for minors using TikTok. After all, the DSA provides strict rules on the protection of minors, and TikTok is known for appealing to the younger audience due to the nature of the medium.

TikTok itself has already stated that they are pioneering features and settings to protect teens and ban users under the age of 13 from the platform. They emphasise their continued collaboration with experts and the industry to ensure the safety of young people on TikTok.

What happens next?

The EC will proceed with gathering evidence to determine whether TikTok has, in fact, committed violations under the DSA. As it is the first official investigation by the EC under the DSA, it is hard to predict the following steps and how long the investigation will take.

TikTok could face far-reaching sanctions as violations of the DSA can lead to significant fines of up to 6% of the company’s global annual turnover. In addition, the EC can take other measures, such as imposing interim measures (with penalty payments), enforcing specific measures to correct the infringements or even banning the platform in the EU. It may not get that far. In any case, we all wait with anticipation to see whether the EC decides to be lenient or principled and strict in this first investigation. Other large tech companies undoubtedly actively follow this investigation and are curious to learn its outcome as they may be next in line.