The European Commission has issued preliminary findings that TikTok is in breach of the European Union's Digital Services Act (DSA) for failing to provide adequate transparency over online advertising, officials announced on Thursday.

Following an investigation launched in February 2024, EU regulators concluded that the Chinese-owned video platform has not maintained a proper advertisement repository that allows researchers and the public to scrutinise who pays for advertising and how users are targeted.

"Transparency in online advertising – who pays and how audiences are targeted – is essential to safeguarding the public interest," said European Commission tech chief Henna Virkkunen.

The commission stated that TikTok has failed to provide necessary information about advertisement content, targeted users, and who paid for the publicity. If the preliminary conclusions are confirmed, TikTok could face a fine of up to 6 per cent of its global annual turnover.

A TikTok spokesperson responded to the allegations, saying: "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 advertising transparency investigation is just one of several ongoing EU probes into TikTok. The commission is also conducting a separate inquiry into TikTok's suspected failure to guarantee election integrity in Romania, which was launched in December 2023. This investigation remains ongoing and is described as a priority by the commission.

Thomas Regnier, a commission spokesperson, clarified that there was no direct link between the December investigation and Thursday's preliminary findings on advertising transparency, though he acknowledged that an inadequate ad repository "doesn't help us to assess if there were fake or scam ads being used in the context of elections."

The commission is also investigating other potential breaches by TikTok, including whether its algorithms lead users down damaging content "rabbit holes" with addictive effects, and whether its age verification and child safety policies are adequate.

TikTok now has the right to examine the commission's investigation file and prepare a defence before the EU reaches a final decision.

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