Constitutional Discourse has dealt with the attention around TikTok in previous articles. János Tamás Papp’s articles have dived deep into the fight of the United States Legislature with TikTok’s national security and state sovereignty issues. Now, TikTok has announced the withdrawal of its rewards program in the European Union, having the first significant win of the Commission after a long battle with the platform giant.

On 5 August 2024, the European Commission published the news that TikTok had committed to withdrawing its Lite Rewards program amidst formal proceedings investigating the program’s compliance with the Digital Services Act (DSA). This can be considered a success for both the Commission and the DSA as—after 105 days—it is the first ever case where commitments were taken by a designated (Very Large Online Platform with 135.9 million active users monthly) online platform that were accepted by the European Union’s institution.

The more than three months-long battle started on 22 April this year when the Commission started formal proceedings based on previous investigation results. The preliminary analysis assessed in September 2023 that TikTok poses a significant risk to data accessibility and minors. The inspection from the Commission came for providing proportionate risk assessment according to the DSA (Article 34). According to the Commission, TikTok creates a so-called “rabbit-hole effect.” This phenomenon means a system that creates such stimuli that likely drive the user to behavioral addictions easily resulting in radicalization or decline in physical and/or mental health, especially for minors. Furthermore, the Commission accessed that TikTok’s age verification tools are incompliant with the DSA by not posing a proportionate and appropriate tool to ensure privacy and safety of minors. In the investigations, the infringement of several articles of the DSA was suspected (such as the 34(1)-(2) or the 39(1) among more).

The app in question is called TikTok Lite and is a spin-off app of the media giant. It might be unfamiliar to many citizens as it was quietly launched by TikTok in April in Spain and France. The app was originally designed for users with slower internet speeds saving data (hence the name lite = data-light). The app was already introduced in 2018 in Thailand and currently has more than 1 billion downloads in countries like Brazil, India, and Indonesia. The idea of the app in itself proposes no harm for users but that is not all that the new TikTok Lite would have offered. The “Task and Reward Lite” program of the app aimed at users older than 18 years old (not minors) was designed so that the user can earn points by performing certain tasks such as liking different content, following others, and inviting new members to join, which points can later be exchanged for vouchers or gift cards in companies like Amazon or PayPal (in-app currency).

This function of the app according to the Commission proposes a significant risk of behavioral addictions that also threaten minors as TikTok’s age verification procedure fails to ensure privacy and safety of underage users. Commissioner Thierry Breton raised concerns by posting on X (formerly known as Twitter) questioning whether TikTok Lite is as “addictive and toxic” as cigarettes “light”, also stating that the Commission is not afraid to impose fines on TikTok for “incorrect, incomplete or misleading information” if it fails to correctly disclose the requested information (according to Article 71).

The DSA entered into force in February this year and there are currently multiple formal proceedings against other designated online platforms as well for the potential infringement of the DSA’s articles. On-going proceedings include inspections against X, AliExpress, and two cases against Meta (as of 5 August 2024 according to the Commission’s press release). This case against TikTok was the first ever to reach an agreement under the DSA which makes it influential and signaling for other platforms as well for the future.

In its proposal, TikTok agreed to a permanent withdrawal of its Lite app, which is considered by the Commission as a significant message that the “brain time of young Europeans is not a currency” and that it sends a strong tone for the future that the DSA is “in full swing” and the social media industry shall be aware and abide the rules. However, it is important to add that it is only the first case, therefore, over-optimism may be too early, and the Commission might be counting its chickens before they are even hatched. But it must also be acknowledged that it is a substantial first step as a significant agreement was reached.

The commitments made by the platform giant, TikTok became legally binding with the Commission’s acceptance (Article 71). Therefore, in case TikTok fails to comply with these promises, it could result in serious fines. Breaching the DSA could result in up to 5% of the daily income or worldwide annual turnover according to the Act (Article 76 (1) and Article 52 (4) ) for a periodic payment. The imposable fines are set for a maximum of 6% of the annual worldwide turnover in the preceding financial year (Article 52 (3) and Article 74 (1) ). This is a substantial amount, which potentially encourages TikTok to refrain from breaching the Act.

With the agreement reached between the Commission and TikTok, this became the first-ever case since the DSA entered into force in February that resulted in a commitment that was accepted by the Commission. TikTok’s decision to impose a voluntary suspension of introducing the app applies to the European Union’s territory, so, it will be still possible to reach it from another country or by using a VPN (Virtual Private Network). But all in all, it can be considered an immense landmark agreement that could serve as a precedent for ongoing and future cases as well.

Dorina BOSITS is a law student at the Széchenyi István University of Győr, Hungary, and an international finance and accounting graduate of the University of Applied Sciences of Wiener Neustadt, Austria. She is currently an exchange student at Karl Franzes University of Graz, Austria. The main area of her research includes freedom of speech, digitalization, space law, data protection, and financial law. She is a student at the Law School of MCC and a member of ELSA Győr.