TikTok Faces Ofcom Investigation and AI Content Controversy

3 hour ago 2 sources neutral

Key takeaways:

  • TikTok's legal troubles could shift user attention to decentralized social platforms, benefiting SOL.
  • Backlash against AI-generated content may dampen sentiment for AI crypto tokens like FET.
  • Creator affiliation surge hints at ripe conditions for tokenized reward ecosystems such as Rally.

TikTok is under formal investigation by UK internet regulator Ofcom over how children bypass its age filters. The regulator questions the platform's use of "age inference"—estimating age through behavior—calling it insufficient under the law. Kate Davies, Ofcom's group director for strategy and research, stated: "We have serious doubts about them, and so we have launched an investigation into TikTok." TikTok could face fines of up to 10% of its global revenue if found in breach. A spokesperson expressed confidence in meeting Online Safety Act obligations, citing billions spent on safety since the UK launch eight years ago. Separately, TikTok recently removed over 4 million under-16 accounts in Indonesia.

Simultaneously, a backlash is growing against AI-generated product videos on TikTok Shop. The platform's tools allow sellers to create computer-generated clips with virtual models, drawing commissions and angering real-life creators. Rosemarie Soma, an affiliate creator, said: "It’s very frustrating for affiliates because these [AI] videos are getting ad spend and are making sales." SharkNinja, a home appliance brand, banned TikTok's AI Video Maker under its content policy via a memo to affiliate sellers, with chief commercial officer Neil Shah insisting: "We didn’t want an AI-generated Shark vacuum cleaning an AI-generated floor." US TikTok Shop sales are projected to hit $23.41 billion this year, up 48%, with the affiliate program ballooning from 2.3 million creators in 2024 to 11.3 million in 2025. Despite brand pushback, enforcement remains difficult—Rare Beauty, for example, found AI videos promoting its products without authorization, though its items appear in TikTok's open affiliate plan.

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