Meta And TikTok Win EU Court Fight Over Tech Fees

Meta and TikTok scored a legal victory this week after an EU court ruled that the European Commission needs to revise its method for calculating Digital Services Act (DSA) supervisory fees.

The General Court in Luxembourg supported the tech companies by declaring the Commission used improper legal procedures to establish the fee system.

Judges ruled that the fee calculation “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,” as first reported by Reuters.

The Luxembourg-based General Court sided with the tech giants, saying the Commission had used the wrong legal procedure when setting the levy. Reuters notes that the annual fee amounts to 0.05% of worldwide net income from companies to support EU expenses for DSA compliance monitoring.

The fee amount depends on user numbers and the profit status of each company. Critics argued that the fee structure produced unequal results as loss-making companies with large user bases to avoid paying while others were overcharged.

According to the ruling, EU regulators must create new rules within the next 12 months. The companies will not receive any reimbursement for their previously paid fees.

The Commission downplayed the impact, with spokesperson Thomas Regnier saying: “The Court confirms our methodology is sound: no error in calculation, no suspension of any payments, no problem with the principle of the fee nor the amount,” as reported by Politico.

Another spokesperson added, “The Court’s ruling requires a purely formal correction on the procedure,” reported Reuters

Meta welcomed the decision, stating: “Currently, companies that record a loss don’t have to pay, even if they have a large user base […] We look forward to the flaws in the methodology being addressed”. TikTok also welcomed the ruling, saying: “We’ll closely follow the development of the delegated act,” all reported Reuters.