Meta Platforms and TikTok have taken their fight against a European Union supervisory fee to the EU’s second highest court, arguing that the levy imposed under the Digital Services Act (DSA) is both disproportionate and based on a flawed calculation method.
On Wednesday, legal representatives for the tech giants appeared before the General Court of the European Union to contest the annual fee mandated by the DSA, which became law in 2022. The fee, designed to cover the European Commission’s cost of monitoring compliance, amounts to 0.05% of a company’s annual worldwide net income.
Meta, the parent company of Facebook and Instagram, told judges that it was not attempting to avoid paying its fair share but criticized the way the Commission had determined the levy. According to Meta’s legal team, the calculation was based on the revenue of the entire group rather than the specific European subsidiaries that are subject to the DSA’s obligations. This, they argued, resulted in an inflated and unfair fee.
TikTok, owned by China’s ByteDance, echoed Meta’s concerns, saying the Commission’s methodology lacked transparency and failed to consider the economic realities of how digital services operate across different jurisdictions.
Under the DSA, 19 major digital platforms and search engines have been designated as “very large online platforms” (VLOPs), requiring them to comply with stringent rules to combat illegal content and ensure transparency in online advertising. The supervisory fee is intended to fund the Commission’s oversight of these obligations, but companies argue that the burden should be more equitably distributed.
The European Commission has defended its approach, stating that the methodology for calculating the fee was clearly defined and aims to ensure fairness while recouping regulatory costs.
The General Court’s ruling, expected in the coming months, could have significant implications for the DSA’s enforcement mechanism and the financial responsibilities of tech giants operating in the EU. If Meta and TikTok succeed, the Commission may be forced to revise how it calculates supervisory fees, potentially altering the financial landscape for all major platforms under the law.
