TikTok Faces EU Heat Over Ad Transparency Failures, Could Face Major Global Revenue Fine

The ByteDance-owned app could be fined up to 6% of global revenue under Digital Services Act.

TikTok will have the opportunity to examine the Commission’s documentation and submit a written response before any final decision is taken.

Source : Freepik

TikTok is under fire from European Union regulators for allegedly violating key provisions of the Digital Services Act (DSA), a sweeping law aimed at policing digital content across major online platforms. On Thursday, as reported by Reuters, the European Commission formally accused the social media giant of failing to comply with transparency rules around advertising.

The charges follow an in-depth investigation launched in February 2023, focusing on how TikTok handles advertisements and provides access to information about them. The Commission says the platform did not set up a publicly accessible ad repository — a requirement under the DSA that allows users and researchers to scrutinise online advertisements for potential scams or harmful content.

The watchdog also flagged TikTok’s failure to disclose vital information regarding its ad practices, including details about who pays for the ads, what kind of content is being promoted, and how specific audiences are targeted.

EU Tech Chief Calls for Greater Accountability

The EU’s stance is anchored in concerns over public safety and transparency in the digital realm. “Transparency in online advertising — who pays and how audiences are targeted — is essential to safeguarding the public interest,” said EU tech chief Henna Virkkunen.

The Commission has not yet issued a final ruling but has sent its preliminary findings to TikTok, marking a significant step in the regulatory process. If TikTok is ultimately found guilty of breaching the DSA, it could face fines of up to 6% of its global turnover.

This is not the only headache TikTok is dealing with in Brussels. The platform is already being scrutinised in a separate DSA investigation related to how it manages risks associated with electoral interference.

TikTok Pushes Back, Seeks Clarity

TikTok, owned by Chinese tech firm ByteDance, responded to the allegations by defending its efforts to comply with the DSA’s objectives. A company spokesperson emphasised that while TikTok supports the goals of the regulation and is actively improving its ad transparency systems, it disagrees with some of the EU’s interpretations.

“While we support the goals of the regulation and continue to improve our ad transparency tools, we disagree with some of the Commission's interpretations and note that guidance is being delivered via preliminary findings rather than clear, public guidelines,” the spokesperson said.

"A level playing field and consistent enforcement are essential," the statement added, pointing to broader concerns over regulatory fairness.

Next Steps: Response Before Ruling

TikTok will have the opportunity to examine the Commission’s documentation and submit a written response before any final decision is taken. The outcome of this case could set an important precedent, as the EU flexes its regulatory muscles under the newly enforced DSA to hold Big Tech accountable for online safety and transparency.

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