EU regulators say TikTok's algorithm funnels users into harmful rabbit holes

What regulators found

The investigation under the Digital Services Act began in February 2024, and regulators have now issued preliminary findings. Officials report that TikTok's recommender steers people into loops based on previous engagement, and that the company did not evaluate the hazards of that setup or put measures in place to reduce them. The Commission cautioned that repeated exposure to this type of material can negatively affect mental health, such as by elevating sadness and anxiety, fostering dissatisfaction with one's body, diminishing self-esteem, and exacerbating preexisting eating disorders and other mental health issues.

Earlier this year, the Commission determined that TikTok's design violated the DSA. These latest findings focus less on features that keep users scrolling and more on what the algorithm delivers once it figures out a user's interests.

What the Commission wants changed

Regulators recommended that ByteDance's TikTok adjust the "For You" feed by taking explicit user preferences into account and by potentially removing viewing time as a signal for what to play next. Brussels has increasingly zeroed in on mechanics like infinite scroll, autoplay, and the personalized stream as it tries to rein in features that can addict users or expose children and other vulnerable groups to harmful material. Separately, proposals to prohibit social media for young teenagers have been put forward by Commission President Ursula von der Leyen.

Process, penalties, and responses

These findings are not final. TikTok is allowed to submit a reply and suggest remedies before the Commission makes its decision. If the Commission ultimately determines the platform violated the law, fines could be set at 6% of a company's global annual revenue. The probe also scrutinizes privacy practices and protections for minors.

TikTok pushed back. "The Commission has made a series of statements that are fundamentally inaccurate and distort our platform's architecture and our commitment to user safety," TikTok said in a statement. "We have a strong record of protecting our community while giving users direct and intuitive control over their content experience."

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In 2025, the EU hit ByteDance with a €530 million fine over the unlawful transfer of user information to China, and in 2023 it imposed €345 million for failures in its handling of children's personal data. The €530 million figure was reported as $592 million.

What this means for your portfolio

The bottom line: Brussels is tightening oversight of social feeds, and TikTok could face design changes or penalties if the preliminary view becomes a formal decision. With regulators also probing privacy and minor protections, regulatory risk remains elevated for large social platforms.

For investors, watch two threads closely: any product tweaks TikTok offers in response, and whether the EU's approach becomes a playbook for other platforms. Changes to recommendation signals can ripple through engagement and ad performance, which ultimately show up in revenue for companies built on algorithmic feeds.

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