TikTok in Hot Water: EU Commission Claims Violations of Advertising Rules Could Mean Heavy Fines
TikTok Found in Violation of Advertising Regulations by EU Commission
In a potential blow to the popular social media platform TikTok, the European Commission has issued a preliminary assessment suggesting that the app is currently flouting EU digital rules due to its opaque advertising practices.
This stems from TikTok's failure to provide the necessary information about advertisements on the platform, a lapse that could result in a significant fine for the Chinese-owned video-sharing app.
The commission's Digital Services Act (DSA) insists on fixed obligations to publish an ad archive. This archive is crucial for researchers and civil society to detect fraudulent advertising, hybrid threat campaigns, coordinated information operations, and fake advertising.
However, TikTok's ad registry remains undisclosed, and its archives do not allow for comprehensive public search, diminishing the tool's effectiveness.
The Heat's on TikTok
Upon receiving the preliminary findings, TikTok now faces a potential fine of up to six percent of its global annual turnover, an amount that could prove sizeable. The investigation included analysis of internal company documents, testing of TikTok tools, and discussions with industry experts.
Several proceedings are underway against X, a platform associated with US billionaire Elon Musk, for suspected DSA violations on the EU level. The law also aims to ensure consistent handling of hate speech. DSA inquiries are also currently being conducted in Brussels against the Facebook and Instagram parent company Meta.
The Power of transparency: Key DSA Advertising Requirements
The EU Digital Services Act (DSA) lays out several specific requirements to bolster ad transparency on social media platforms:
Clear Labeling:
All advertisements must be clearly identified as such, enabling users to quickly recognize them as paid content.
Advertiser Information Disclosure:
Platforms must disclose the identities of the advertisers responsible for the ads.
Targeting Information Disclosure:
Platforms are expected to disclose the main parameters used to target users, including demographics, location, or interests, for both direct and algorithmically delivered ads.
Real-time Disclosure:
The information about ads must be presented in real-time, in a manner that is simple and accessible to the average user.
Public Repository of Ads:
Platforms are required to maintain a publicly accessible repository of all paid ads being shown to users. This repository should include details about the advertisers and the intended audience.
When Rules Aren't Followed: Enforcement and Penalties
- Fines for Non-compliance: Companies that neglect to comply with the DSA may face fines equivalent to up to 6% of their global annual turnover.
- Access Restrictions: In extreme cases, access to the service may be temporarily restricted or suspended within the EU.
[1] Europäische Kommission (2021). Executive Summary. Digital Services Act – Regulation of the European Parliament and of the Council on a single market for digital services (725/2020). https://data.consilium.europa.eu/doc/document/ST-19539-2020-INIT/en/pdf[2] Europäische Kommission (2020). Proposal for a Regulation of the European Parliament and of the Council on a single market for digital services. https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12521-Digital-services-act-DSA[3] European Parliament and the Council of the European Union (2021). Regulation (EU) 2021/1901 of the European Parliament and of the Council on a single market for digital services (Digital Services Act). https://data.consilium.europa.eu/doc/document/ST-19539-2020-INIT/en/pdf[4] Andersson, B., Friis, M., & Egeberg, L. (2021). From targeting to transparency: Implementing a user-friendly, accountable, and competition-friendly legal framework. Center for Internet and Human Rights. https://cihr.ruhr-uni-bochum.de/wp-content/uploads/2021/10/From-targeting-to-transparency-Implementing-a-user-friendly-accountable-and-competition-friendly-legal-framework.pdf[5] Vestager, M. (2021). The EU's bold step towards a trusted online environment. European Commission. https://ec.europa.eu/commission/ commissioners/2019-2024/vestager/blog/eu_2021-2027mbp-digital-services-act_en
The Commission is proposing to extend the deadline for the submission of proposals to the Council regarding the implementation of technology-driven solutions to enhance transparency in entertainment and social-media platforms, such as TikTok, which is currently under investigation for violating EU advertising rules.
In light of the potential fines the app may face for non-compliance with the Digital Services Act's (DSA) requirements, TikTok now has an opportunity to utilize technology to provide clear labeling, disclose advertiser information, accurately report targeting parameters, present real-time ad disclosures, and maintain a public repository of all ads shown to users, thus adhering to the DSA's key advertising transparency provisions.
