Meta and TikTok win EU legal battle over Digital Services Act fee
The DSA, which came into effect in November 2022, mandates that very large online platforms take stronger action against illegal and harmful content or face penalties of up to 6% of their annual global turnover.
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Meta Platforms and ByteDance-owned TikTok secured a major legal victory on Wednesday after Europe's General Court struck down the supervisory fee imposed on them under the EU's landmark Digital Services Act (DSA), Reuters reported.
The Luxembourg-based court faulted European Commission regulators for the way they calculated the levy, siding with the tech giants who had challenged the fee structure as flawed and disproportionate.
The Dispute
Meta and TikTok sued the Commission after being charged a supervisory fee equivalent to 0.05% of their annual worldwide net income to cover compliance monitoring costs under the DSA.
The size of the levy was determined by the companies' average monthly active users and their profitability in the previous year.
Both firms argued that the methodology unfairly burdened them, resulting in disproportionate fees compared to other platforms.
The Court's Ruling
Judges concluded that EU regulators had applied the wrong legal framework. "That methodology... should have been adopted not in the context of implementing decisions but in a delegated act, in accordance with the rules laid down in the DSA," the ruling stated, as per the report.
The court has given the Commission 12 months to revise the methodology using the correct legal basis. However, it clarified that regulators are not required to repay the supervisory fees collected for 2023.
Wider Implications
The ruling affects not only Meta and TikTok but also other large platforms subject to the DSA fee, including Amazon, Apple, Google, Microsoft, Booking.com, Snapchat, Pinterest, and Elon Musk's X.
The DSA, which came into effect in November 2022, mandates that very large online platforms take stronger action against illegal and harmful content or face penalties of up to 6% of their annual global turnover.
