TikTok lacks transparency in ad repository, EU’s preliminary findings suggest

TikTok does not fulfill the Digital Services Act’s (DSA) obligation to publish an ad repository. If found guilty, TikTok’s parent company, ByteDance, might receive a large non-compliance fine.

In February 2024, the European Commission launched an inquiry into TikTok’s advertisement repository. According to the Commission, such an ad repository is significant for researchers and civil society to detect scam ads, hybrid threat campaigns, as well as coordinated information operations and fake advertisements.

On Thursday, the European Commission shared its preliminary findings with TikTok’s Chinese parent company, ByteDance. The Commission has found that the social media platform doesn’t provide the necessary information about the content of the advertisements, the users targeted by the ads, and who paid for the advertisements.

In addition, TikTok’s ad repository does not allow the public to search comprehensively for advertisements on the basis of this information, thereby limiting the usefulness of the tool. This means that TikTok doesn’t meet the requirements mentioned in the DSA.

These conclusions are based on a thorough analysis of company documents, interviews with experts, and tests of TikTok’s tools.

TikTok has the right to defend itself against the preliminary results of the European Commission. If the conclusions prevail, the Commission may seek to impose a non-compliance fine, which could go as high as 6% of the company’s worldwide annual turnover. The Commission could also impose an enhanced supervision period to remedy the situation.

“Transparency in online advertising is essential to safeguarding the public interest. Whether we are defending the integrity of our democratic elections, protecting public health, or protecting consumers from scam ads, citizens have a right to know who is behind the messages they see.

“In our preliminary view, TikTok is not complying with the DSA in key areas of its advertisement repository, preventing the full inspection of the risks brought about by its advertising and targeting systems,” Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, says in a statement.

TikTok opposes the preliminary findings of the European Commission.

“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. A level playing field and consistent enforcement are essential,” a TikTok spokesperson told Reuters.

TikTok has been receiving a lot of heat over its privacy and data protection practices. The Irish Data Protection Commission (DPC) recently issued a fine of €530 million against the video platform for unlawfully transferring data to China. In September 2023, the same privacy regulator fined TikTok €345 million ($387 million) for violating children’s privacy.