The European Union has set its sights on tech companies once again, with TikTok being the latest target of their scrutiny. The EU is launching an investigation into whether the popular social media platform has violated regulations designed to protect children and ensure transparent advertising. If found guilty, TikTok could face a substantial fine.

The investigation will focus on TikTok’s system design, including its algorithmic features that might encourage addictive behaviors and lead to what’s known as the rabbit hole effect. This phenomenon describes becoming deeply engrossed in something to the point of losing track of time or neglecting other responsibilities, often seen with internet content.

In addition to protecting minors, the European Commission is examining whether TikTok offers a reliable database of ads on its platform, enabling researchers to analyze potential online risks. The investigation is part of the EU’s Digital Services Act (DSA), which aims to combat illegal online content and ensure public safety.

If found in violation of the DSA rules, the owner of TikTok, ByteDance, could potentially face fines amounting to up to 6% of its global turnover. With TikTok generating an estimated $9.4 billion in revenue in 2023, this could potentially result in a fine of around $500 million.

TikTok has stated that it remains committed to collaborating with experts and the industry to ensure the safety of young people on its platform. The company also expressed its readiness to provide detailed explanations of its efforts to the European Commission.

Stay tuned for updates as this investigation unfolds!