TikTok Lite arrived in France and Spain in March allowing users aged 18 and over to earn points that can be exchanged for goods like vouchers or gift cards through the app's rewards programme.
The European Commission said in a statement it has concerns about the app's "risks of serious damage for the mental health of users", including minors.
TikTok Lite is a smaller version of the popular TikTok app, taking up less memory in a smartphone and made to perform over slower internet connections.
TikTok last week failed to provide a risk assessment for the spinoff app by an April 18 deadline, the commission said, demanding the company now hand it over by Tuesday.
It is threatening to impose interim measures including suspending the rewards programme in the European Union "pending the assessment of its safety".
TikTok, owned by China's ByteDance, has until Wednesday to present a formal defence against such a measure.
The commission also warned if TikTok failed to reply to the request, it could impose fines of up to one percent of its total annual income or of its global turnover and periodic penalties up to five percent of its average daily income or annual turnover worldwide.
TikTok said it would continue discussions with the commission but insisted the programme was not available to minors.
"We are disappointed with this decision -- the TikTok Lite rewards hub is not available to under 18s, and there is a daily limit on video watch tasks," a TikTok spokesperson said in a statement.
- Second TikTok probe -
The probe is the EU's second against TikTok under a sweeping new law, the Digital Services Act (DSA), that demands digital firms do more to police content online.
"We suspect TikTok 'Lite' could be as toxic and addictive as cigarettes 'light'," said the European Commission's top tech enforcer, Thierry Breton.
"Unless TikTok provides compelling proof of its safety, which it has failed to do until now, we stand ready to trigger DSA interim measures including the suspension of TikTok Lite features," Breton said.
The commission also quizzed TikTok about its measures to mitigate "systemic risks" in its Lite app and gave the platform until May 3 to respond.
TikTok Lite users can win rewards if they log in daily for 10 days, if they spend time watching videos (with an upper limit of 60 to 85 minutes per day) and if they undertake certain actions, such as liking videos and following content creators.
The commission said it believes TikTok launched the app "without prior diligent assessment of the risks it entails, in particular those related to the addictive effect of the platforms, and without taking effective risk mitigating measures".
TikTok is among 22 "very large" digital platforms, including Amazon, Facebook, Instagram and YouTube, that must comply with stricter rules under the DSA since August last year.
The law gives the EU the power to slap companies with heavy fines that could reach as high as six percent of a digital firm's global annual revenues.
Repeat offenders can even see their platforms blocked in the 27-country European Union.
In February, the commission opened a formal probe into TikTok under the DSA over alleged violations of its obligations to protect minors online.
It has separately launched other investigations into X, formerly known as Twitter, and Chinese internet retailer AliExpress.
TikTok is also being squeezed across the Atlantic.
The US House of Representatives passed a bill on Saturday that would force TikTok to divest from ByteDance or face a nationwide ban in the United States, where it has around 170 million users.
Chinese sellers go to TikTok school to reach buyers abroad
Guangzhou (AFP) April 24, 2024 -
Donning hijabs and floor-length abaya gowns over shorts and tank tops, Chinese students at an e-commerce school perform into a smartphone camera as they learn how to sell the clothes to overseas TikTok users.
It is the final day of a two-week course on selling products abroad via the short video app -- which despite being blocked in China is a platform more and more Chinese vendors are turning to.
Succeeding on TikTok requires tools for bypassing internet restrictions as well as foreign-language skills, challenges that have prompted a boom in courses and consulting services.
At the school in Guangzhou in southern Guangdong province, an instructor holds up the Middle Eastern-inspired garments to the camera and rattles off prices and sizing information for Muslim buyers in the UK.
"This is chiffon, it's really breathable!" she gushes in English as her proteges model the goods and sort through racks of satin robes under stark studio lights.
"We teach people which products are selling better, and which markets are more suitable for their current stages," 27-year-old Wang Yaxuan, another instructor at the school, tells AFP.
Guangdong is home to thousands of factories making a mindboggling variety of products, from the abayas to espresso machine parts to wigs made of human hair.
After decades of producing goods for export, Chinese companies are increasingly seeking to cut out the middleman and market themselves at lower prices, directly to overseas consumers.
Shein, the China-founded fast fashion giant, has effectively taken over the lower-end Western market using this strategy, with TikTok a key facet of its selling network.
TikTok Shop launched in the United States late last year, and e-commerce features have previously been rolled out in places like Britain and Southeast Asia.
A casual scroll on the hugely popular app's "Live" tab can land users on multiple shopping livestreams within minutes.
But with TikTok unavailable in China -- parent company Bytedance operates the more strictly censored sister app Douyin domestically -- smaller businesses there are at a disadvantage.
Courses like the one at Mede Education Technology's e-commerce school help by covering everything from the basics of creating a TikTok account to handling shipping and analysing sales data.
Fees start at around 9,000 yuan ($1,244) for a six-day course.
Students, who range from factory owners to fresh graduates, often take classes for multiple foreign shopping platforms including Amazon and Southeast Asia's Shopee.
- Information gap -
Qiu Zhouwen, a course participant in his 30s, works for a Guangzhou cosmetics company.
He says his company enrolled him because they are hoping to eventually sell their skincare range through TikTok.
"Information is part of the cost (of doing business) now, and if you don't have the information that's appropriate to the market, your cost will be way too high," Qiu says.
Wang, the Mede instructor, attended university in the United States and says it can be challenging for Chinese sellers to adapt to different consumer tastes abroad.
Chemical manufacturer Donghua Jinlong spawned viral memes on TikTok this month after overseas social media users found absurdist humour in the company's matter-of-fact videos about industrial-grade glycine featuring AI-generated voiceovers.
There are also significant technical hurdles.
Accessing TikTok from China requires VPN software to bypass the country's virtual "Great Firewall", while dodging the app's own curbs on users manipulating their IP addresses.
VPNs are a legal grey area in China, with authorities occasionally cracking down while generally tolerating their use for business purposes.
TikTok is also caught up in global geopolitical tensions -- the US Congress is threatening to ban the app entirely over concerns it could share personal data with the Chinese government.
Wang is unfazed by the prospect of a US TikTok ban.
"Our students are not just selling to the US market... the current trend for TikTok for Southeast Asia is also very good," she tells AFP.
Wang says it's not the first time this situation has happened, adding that she feels the United States was trying to "take this huge cake and split up the market".
- Catchphrases and clicks -
Mede is one of many organisations running TikTok classes, including others based in Guangdong, where authorities have hung up propaganda banners promoting international e-commerce.
Those not willing to shell out steep course fees can also seek advice from e-commerce veterans who have built a following on Chinese social apps by sharing TikTok tips.
Molly Zhao, a 23-year-old TikTok livestreamer, has been selling products including clothing and electronics online since 2022.
Zhao, who studied in Italy and speaks Italian and English, told AFP her foreign-language skills have earned her livestreaming jobs paying as much as 20,000 yuan ($2,760) each month.
She regularly posts videos for domestic viewers on Douyin, covering topics including common English phrases and how to explain shipping rates clearly.
"You must build up the atmosphere," she explains in one video, adding that using a catchphrase can "make a deeper impression on customers".
In another video, a smiling, dancing Zhao shares her warmup routine before a livestream session selling gemstones and crystals to US viewers.
"Time to earn Americans' money," she says in a deadpan caption. "I'll put on some music to hype myself up."
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