On Wednesday, Meta Platforms and TikTok challenged the European Union’s supervisory fee imposed on them, labeling it as excessive and reliant on an inaccurate assessment methodology. The tech giants brought their grievances before Europe’s second-highest court, escalating their conflict with regulatory authorities.
The fee, established under the Digital Services Act enacted in 2022, applies to Meta, TikTok, and 16 other companies, totaling 0.05% of their annual global net income. This charge is intended to fund the European Commission’s efforts in overseeing compliance with the new law.
The calculation for this fee is dependent on each company’s average monthly active user count and their profit or loss from the previous fiscal year.
During the court proceedings, Meta contended that while they do not intend to evade their financial responsibilities, they challenged the method used by the Commission to set the fee. Meta’s representatives argued that the calculation was focused on the overall group’s revenue, rather than that of its specific subsidiaries.
During the hearing, Meta’s attorney, Assimakis Komninos, expressed concern that there remains a lack of clarity surrounding the fee’s calculation. He criticized the provisions within the Digital Services Act, asserting that they contradict both the law’s intent and its transparency, resulting in outcomes that are implausible and unreasonable.
TikTok, owned by ByteDance, echoed these sentiments, asserting that the fee structure is neither fair nor proportionate. TikTok’s lawyer, Bill Batchelor, highlighted issues with inaccurate data use and biased approaches in an effort to illustrate the inflated costs imposed on the platform.
Batchelor noted that TikTok is penalized not just for its operations but also for others, dismissing the established fee cap as excessive. He further argued that regulators had miscalculated user numbers by counting individuals multiple times when they switch between devices, which he deemed discriminatory.
In defense of the Commission, lawyer Lorna Armati rejected the criticisms from both companies and justified the use of group profit as the benchmark for calculating the supervisory fee. She asserted that financial resources from consolidated accounts reflect the overall capacity of a provider to manage the fee burden.
Armati reassured the court that the companies had adequate information regarding the Commission’s rationale and methodology, asserting that there were no violations of their rights to a fair hearing or issues with unequal treatment.
The General Court is anticipated to deliver its decision next year, with the cases designated as T-55/24 Meta Platforms Ireland v Commission and T-58/24 TikTok Technology v Commission.
© Thomson Reuters 2025
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