The European Commission is considering suspending TikTok's "money-for-views" rewards program, which pays users for spending time on the app, due to concerns over its addictive nature, particularly for children.
TikTok has until Wednesday to respond before the feature may be suspended as early as Thursday.
The Commission has also initiated formal proceedings against TikTok to assess if it has violated EU law.
TikTok expressed disappointment with the decision.
The European Union implemented a law requiring large platforms like TikTok to submit risk assessments before making significant changes to their products.
Last week, the European Commission requested TikTok's assessment for their new "Task & Rewards" program on TikTok Lite, but TikTok failed to submit it on time.
The Commission expressed concern over potential negative effects on users' mental health.
The "Task and Rewards" program, launched in France and Spain, is a feature on TikTok Lite that rewards users with a few pence per day for watching videos and engaging on the app.
The French Advertising Regululatory Commission is investigating TikTok's new feature, which rewards users for engaging in live streams, over concerns it may negatively impact mental health, particularly among children, and potentially encourage addictive behavior.
TikTok claims the rewards are only for users over 18 and age verification tools are in place, but the Commission suspects inadequate age verification mechanisms.
The feature is currently limited to France and Spain, but is also available in some countries in southeast Asia.
TikTok has no plans to expand it further at present.