Meta and TikTok sue European Commission over Digital Services Act fee

Meta and TikTok confirmed they are suing the European Commission over an annual supervisory fee that companies listed under the EU’s Digital Services Act must pay.

On Wednesday (7 February), Meta announced that they were taking legal action over the fee, with TikTok confirming on Thursday to Euractiv that they intend to do the same.

“We support the objectives of the DSA and have already introduced a number of measures to help us meet our regulatory obligations, but we disagree with the methodology used to calculate these fees”, a Meta spokesperson told Euractiv.

TikTok gave a similar answer, stating they “disagree with the fee and are appealing on a number of grounds, including the use of flawed third-party estimates of our monthly active user numbers as a basis for calculating the total amount.”

The TikTok spokesperson added that, despite the disagreement, they have already paid the fee to comply with the law. A spokesperson from the European Commission also confirmed to Euractiv that all designated platforms “honoured their commitments”.

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The cost of the DSA

The DSA, which will enter into force on 17 February 2024, is a horizontal legislation regulating how online actors should deal with illegal and harmful content.

According to its rules, online platforms used by more than 45 million users per month entail a ‘systemic risk’ for society; hence, they must follow a specific regime of content moderation, including transparency and risk management obligations.

Based on the data provided by platforms operating in the European Union last February, the EU executive announced the first batch of very large online platforms (VLOPs) and very large search engines (VLOSEs) in April, which was then updated at the end of December.

The list includes social media platforms, such as Meta’s Instagram and Facebook, as well as TikTok, X, and other tech companies like Amazon.

The Commission estimated that enforcing the DSA will cost €45.2 million, which is why they are collecting supervisory fees from the companies on the list.

“On 27 November 2023, the Commission adopted a decision setting the individual fees that very large online platforms and very large online search engines are subject to for supervisory and enforcement tasks under the Digital Services Act”, a European Commission spokesperson told Euractiv.

“All designated Very Large Online Platforms and Very Large Online Search Engines are subject to the supervisory fee”, the spokesperson added.

According to the DSA, the Commission is empowered to impose the annual fee on the affected companies. However, the fees may differ for each of them.

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A flawed methodology?

“Currently, companies that record a loss don’t have to pay, even if they have a large user base or represent a greater regulatory burden, which means some companies pay nothing, leaving others to pay a disproportionate amount of the total”, the Meta spokesperson explained to Euractiv.

Last October, Bloomberg also reported that Amazon and X may seem seem likely to avoid paying millions of euros in fees to enforce the new content rules that leave other tech companies responsible for a larger share of the costs.

Euractiv contacted Amazon regarding this, but the tech giant declined to comment.

“All Commission decisions are subject to judicial review. It is the right of companies to appeal. Our decision and methodology are solid. We will defend our position in Court”, a Commission spokesperson told Euractiv.

“It was to be expected that companies would pursue lawsuits regarding parts of the DSA”, Julian Jaursch, project director at Stiftung Neue Verantwortung, the German think tank for digital technologies, politics and society, told Euractiv.

“That early legal action would concern the parts about money is not entirely surprising”, he added, referring to Amazon and Zalando challenging their designation as VLOPs in June and July last year.

Jaursch expressed hope that the outcome of the cases will result in increased clarity on the issue. He explained that such clarity is crucial in the long run, as the revenue generated from the supervisory fee contributes to platform oversight in the EU, aimed at benefiting millions of consumers.

No smooth enforcement

To enforce the regulation, each EU member state has to appoint a national Digital Services Coordinator (DSC).

There are, however, bumps on the road in this aspect of the DSA as well, with MEPs being concerned that the Hungarian DSC may not be independent of the government.

Moreover, despite the fast-approaching deadline, most member states have not designated a coordinator yet. As Euractiv reported, Germany, for example, will likely miss the 17 February deadline.

Meanwhile, on Thursday, it was announced that the DSA’s election guidelines are open for public consultation.

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[Edited by Alice Taylor]

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