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TikTok Shop Expands to France, Germany, and Italy Amid U.S. Uncertainty

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TikTok Shop, the e-commerce division of the popular social media app, is set to launch operations in France, Germany, and Italy starting Monday, marking a major step in its European expansion. The move comes as TikTok’s future in the U.S. remains in jeopardy due to mounting political pressure on its Chinese parent company, ByteDance, to divest the platform.

The shopping feature has been live in the UK since 2021 and entered the U.S. market in September 2023, where it saw robust holiday sales. Despite that momentum, TikTok could face a ban in the United States unless ByteDance secures a deal to transfer ownership to an American buyer.

Accelerated European Growth
Jan Wilk, head of operations for TikTok Shop UK, said the company plans to grow more aggressively in the EU compared to its UK rollout.

“In the UK, this model was very new, and we had to do a lot of education. In Europe, we’re launching with much more speed,” Wilk told Reuters.

In the new markets, TikTok Shop is already onboarding merchants. Notably, supermarket chain Carrefour will sell on the French platform, while AboutYou and Cosnova will participate in Germany.

Beyond Bargain Buys
While TikTok Shop has become known for selling low-cost, direct-from-China goods, the company is working to diversify its product range and price points. Wilk highlighted a UK-based merchant selling second-hand luxury Birkin bags as an example of TikTok Shop’s expanding inventory scope.

The platform’s format allows sellers to host livestreams showcasing products, earning commissions on real-time sales. With a strong influencer ecosystem and built-in entertainment factor, TikTok Shop is pushing for a unique blend of content and commerce.

Strategic Timing
TikTok’s deeper push into Europe could serve as a hedge against potential losses in the U.S., where the platform’s fate hinges on ByteDance’s ability to negotiate a deal. The European expansion also reflects TikTok’s broader ambition to transform from a content-sharing app into a full-fledged e-commerce player in global markets.

Italy Targets Meta, X, and LinkedIn in Landmark Tax Case

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Italy has initiated a landmark tax case, issuing VAT claims against Meta, X, and LinkedIn. The case, which could have widespread implications for the tech industry in Europe, challenges how social networks provide services and treat user data as taxable transactions.

Tax Claims Against Tech Giants

Italy’s tax authorities are claiming substantial amounts from the three U.S. tech giants: Meta (887.6 million euros), X (12.5 million euros), and LinkedIn (140 million euros). These claims span from 2015 to 2022, although the immediate focus is on the years 2015 and 2016, for which claims are set to expire soon.

The Controversial Issue: VAT on Free Services

The central issue in the case revolves around the way these companies provide access to their platforms. Italian authorities argue that the act of users registering on Meta, X, and LinkedIn should be considered a taxable transaction since it involves the exchange of personal data for access to membership accounts.

Meta has strongly opposed this view, asserting that providing access to online platforms should not be subject to VAT. LinkedIn and X have remained silent or unavailable for comment on the matter.

Potential Impact Across the European Union

The case could have wider ramifications across the EU, as VAT is a harmonized tax across member states. Experts suggest that the ruling may force tech companies to reconsider their business models, particularly those offering “free” services that require users to accept profiling cookies. This development could potentially extend to other industries, including airlines and publishers, which rely on similar business practices.

The Path Forward: Court or Settlement?

This is the first time that Italy has issued formal tax assessment notices without reaching a settlement agreement. The companies now have 60 days to appeal the claims, after which they may go to court—a process that could take up to 10 years in Italy. Alternatively, the tax authorities could drop the claims for technical or political reasons, or the companies could agree to pay some of the contested amounts while seeking further assessment from the European Commission.

Italy’s Talks with Musk’s Starlink Stalled Over Geopolitical Tensions

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Negotiations between the Italian government and Elon Musk’s satellite internet company, Starlink, have stalled, according to Italy’s Defense Minister Guido Crosetto. The potential contract, which could have seen Starlink provide secure communications for Italy’s government and defense officials, has been delayed due to shifting discussions from technical issues to political concerns surrounding Musk’s statements and associations.

Prime Minister Giorgia Meloni’s government had been exploring a deal with Starlink to guarantee encrypted communications for diplomats and defense officials in high-risk areas. The proposed deal, valued at 1.5 billion euros ($1.62 billion) over five years, would have seen Starlink’s satellite services expand in Italy, where the company has been operating since 2021 with around 7,000 low-orbit satellites in use globally. However, tensions have arisen due to opposition from Italian politicians questioning the appropriateness of granting a national security contract to a foreign businessman with strong ties to U.S. President Donald Trump.

Crosetto emphasized that discussions should return to a technical level once the political tensions subside, stating that the ultimate goal is to determine what is safest and most useful for Italy’s national security. He referred to Musk as a “visionary genius” but acknowledged the complex political context surrounding the deal.

The situation also reflects the broader geopolitical balancing act that Meloni’s government faces as it navigates Italy’s alliance with the United States. Meloni’s coalition partner, the far-right League, has continued to support both Musk and Trump, putting additional pressure on the government.

Meanwhile, Andrea Stroppa, a representative for Musk in Italy, suggested that while Italy and its European partners should consider developing their own satellite infrastructure, Starlink could offer the most viable solution in the short term to meet urgent operational needs.