The European Commission has informed TikTok of its preliminary findings that the social media platform has breached the Digital Services Act (DSA) by failing to provide an adequate advertisement repository, potentially resulting in fines of up to 6% of its global turnover.

According to the Commission’s investigation, TikTok’s advertising repository lacks critical information about advertisement content, targeted users, and payment sources. 

The investigation also shows that the platform has failed to provide comprehensive search functionality for these advertisements, limiting the tool’s effectiveness.

“Transparency in online advertising — who pays and how audiences are targeted — is essential to safeguarding the public interest,” EU Tech Chief Henna Virkkunen said in a statement. “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.”

This action adds to TikTok’s regulatory challenges in Europe. The company faces a separate DSA investigation concerning its management of risks related to elections and civic discourse.

Earlier this month, the Irish Data Protection Commission fined TikTok €530 million for GDPR violations related to data transfers to China and transparency failures. The regulator determined TikTok failed to “verify, guarantee, and demonstrate” adequate protection for EU users’ data accessed by China-based staff.

TikTok Contests Findings

TikTok has pushed back against the Commission’s preliminary assessment. “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 TikTok spokesperson told Reuters.

The company emphasized the importance of “a level playing field and consistent enforcement.”

TikTok now has the opportunity to examine the Commission’s investigation documents and provide a written response. The European Board for Digital Services will also be consulted.

If the Commission’s preliminary views are confirmed, it may issue a non-compliance decision, triggering fines and an enhanced supervision period. This would come as TikTok pursues its European expansion, having recently announced a €1 billion investment in a new data center in Finland as part of its €12 billion Project Clover initiative to enhance European data security.