2 days ago
Meta and TikTok challenge EU supervisory fee in court over ‘Unfair' calculation: All details
Meta Platforms and TikTok have taken legal action against the European Commission, arguing that a supervisory fee imposed under the European Union's Digital Services Act (DSA) is disproportionate and based on flawed calculations. The challenge was heard on Wednesday by the General Court, Europe's second-highest judicial body.
The fee, introduced as part of the DSA which came into effect in 2022, applies to 19 major online platforms, including Meta and TikTok. It is calculated at 0.05 per cent of a company's global net income and is intended to fund the European Commission's oversight of compliance with the legislation.
However, both companies are contesting how the fee has been assessed. Meta, which owns Facebook and Instagram, criticised the methodology, saying the Commission relied on figures from the parent company rather than its EU-based subsidiaries.
'We are not trying to evade our obligations,' Meta's legal representative Assimakis Komninos told the five-judge panel. 'But the way the Commission has calculated the fee remains unclear to us. It lacks transparency, is riddled with inconsistencies, and produces implausible outcomes.'
Komninos argued that the approach contradicts the intent of the DSA and leaves companies in the dark about how their dues are determined.
TikTok, owned by China's ByteDance, echoed the criticism. Its lawyer, Bill Batchelor, said the fee imposed on TikTok was not only inflated but also unfairly penalised the platform for user behaviour.
'What has happened here is anything but proportionate,' Batchelor said. 'The Commission's method includes duplicated user counts, for example when someone uses TikTok on both a phone and a laptop. This leads to an overestimation of active users and skews the fee unfairly.'
He further argued that the Commission had breached its legal limits by basing the fee cap on group-level profits, rather than on the finances of individual entities.
In response, Commission lawyer Lorna Armati defended the institution's methodology. She said it was logical to use consolidated accounts when calculating the levy, as the financial strength of the entire group supports the subsidiary's ability to comply with regulatory costs.
'All providers were given enough information to understand the calculation process,' she said, denying any breach of the companies' rights or instances of unequal treatment.
The legal challenges are part of two separate cases: T-55/24 Meta Platforms Ireland v Commission and T-58/24 TikTok Technology v Commission. A final ruling from the General Court is expected in 2026.
(With inputs from Reuters)
