TikTok is shutting down its "TikTok Lite" rewards program in Europe, a month after the EU Commission launched a new investigation into the details of the initiative, which dangled cash rewards for activity in the app.

In April, the EU Commission called on TikTok to provide more details about the makeup of the TikTok Lite program, which had given users rewards points for completing a series of actions inside the app.
TikTok had already rolled out the program in France and Spain on a limited basis before catching the attention of the EU officials, who opined that the scheme probably breaches the DSA.

TikTok immediately put the program on hold right after the move and then committed to scrapping the initiative altogether to avoid penalties from the EU Commission.

According to the EU Commission:

TikTok has committed to permanently withdrawing the TikTok Lite Rewards program from the EU. That commitment has now been made binding by the Commission, which says that these commitments have been submitted by TikTok in relation to concerns raised by the Commission in formal proceedings opened against TikTok on 22 April and aimed at ensuring TikTok complies with the DSA.

The main issue the Commission is concerned with regards to this program is that it may inadvertently encourage app addiction especially in the more youthful users by encouraging such users to spend more time on TikTok. Therefore, whatever system may add more systemic risk needs to be submitted for analysis purposes before being put into action.

Potentially, it could face fines up to 6% of a company's global revenue if the Commission found it in violation of the DSA, because TikTok did not address the above concerns.

To avoid the risk of the above-mentioned matter, TikTok has apparently decided to close the program entirely and that practically shuts the Commission's investigation on the said matter.

Today's decision makes those commitments binding, which means that a violation of the commitments would automatically constitute a violation of the DSA and could, therefore, give rise to fines. With this decision, the Commission is also closing the formal procedure which had been opened against TikTok on 22 April.

That also means that TikTok cannot operate any similar schemes without permission from the Commission.

It's a big win for the Commission in terms of policing social media practices and ensuring more protections for EU users. The investigation gives a good outline of how the DSA process will work, and the threat of significant fines is probably enough to act as an effective disincentive to limit such programs; those are the kinds of things EU officials think will be capable of causing harm.

Good for the EU users, in any case, although probably dampening some innovation for the platforms themselves.

Or it'll ensure that accountability and transparency are higher in such process, which, at least in theory should result in better outcomes across the board.