The European Union (EU) has launched a second formal investigation into TikTok, suspecting the popular video sharing platform of violating the EU's Digital Services Act (DSA), an online governance and content moderation framework. The EU also expressed concerns about the potential mental health risks posed by TikTok Lite, a version of the platform that recently launched in France and Spain.

The EU's latest probe specifically focuses on TikTok Lite and its compliance with the DSA's obligation to conduct a risk assessment prior to launching the "Task and Reward Lite" program. The EU is particularly concerned about the potential negative effects on mental health, especially for minors. It will also examine the measures taken by TikTok to mitigate these risks.

The EU's suspicion stems from ByteDance, the parent company of TikTok, failing to produce a risk assessment document requested by the EU. The Commission suspects a "prima facie infringement of the DSA" and has given TikTok until April 24 to present arguments against any potential interim measures that could be imposed. The EU could force the company to suspend access to the TikTok Lite app in the EU while the investigation takes place.

Penalties for confirmed DSA violations can amount to up to 6% of the company's global annual turnover. This means that ByteDance could face substantial fines if the EU determines that it has indeed broken the law. The Commission's first investigation into TikTok, ongoing since February, covers multiple compliance concerns related to the DSA, such as the protection of minors, advertising transparency, data access for researchers, and the management of addictive design and harmful content.

The EU's concerns about TikTok Lite revolve around its "task and reward" feature, which allows users to earn points for actions like watching or liking videos. The points can be exchanged for Amazon gift vouchers or TikTok's own digital currency for gifting to creators. The Commission is worried that this feature could stimulate addictive behavior and negatively impact the mental health of young users.

TikTok is regulated under the strictest regime of the DSA, applying to only a handful of larger platforms. These platforms have additional requirements to proactively identify and mitigate systemic risks, including addictive design that could harm users' mental health. The EU argues that ByteDance failed to fulfill these requirements when it launched TikTok Lite in France and Spain.

The EU's enforcement actions under the DSA can result in fines for failures to produce requested information on time. By failing to submit the required risk assessment paperwork by April 18, ByteDance could face penalties of up to 1% of its total annual income or worldwide turnover, as well as periodic penalties of up to 5% of average daily income or worldwide annual turnover for this compliance failure.

While the EU has not confirmed if it plans to fine TikTok for the delayed risk assessment document, the company has been contacted for a response to the enforcement action. TikTok, in its initial comment, expressed disappointment with the decision and stated that the TikTok Lite rewards hub is not accessible to users under 18, with daily limits on video watch tasks. Discussions between TikTok and the EU are ongoing.

The EU's press release also highlights concerns about the alleged absence of effective age verification mechanisms on TikTok, an issue that is being examined in the ongoing first investigation. Thierry Breton, the EU Internal Market Commissioner, emphasized the importance of protecting children from the potential harms of excessive screen time and stated that the EU will spare no effort in safeguarding their well-being.

As the investigation progresses, the EU will continue its pursuit of compliance with the DSA, aiming to ensure the safety and protection of users, particularly minors, on TikTok.