The Contested Supervisory Fee
Enacted in 2022, the Digital Services Act subjects Meta, TikTok, and 16 other designated "very large online platforms" to an annual supervisory fee. This fee, amounting to 0.05% of their worldwide net income, is intended to cover the European Commission's costs associated with monitoring their compliance with the DSA.
The calculation of this annual fee is determined by two key factors: the average number of monthly active users for each company and whether the company reported a profit or loss in the preceding financial year.
Meta's Transparency and Calculation Concerns
Meta, the parent company of Facebook and Instagram, informed the judges that it is not attempting to avoid paying its fair share of the fee. However, the company is raising serious questions about the Commission's calculation methods. Meta's lawyer, Assimakis Komninos, stated that the company still does not understand how its fee was derived, asserting that the calculation appeared to be based on the group's revenue rather than that of the specific subsidiary.
Komninos further criticized the DSA's provisions for fee calculation, calling them "totally untransparent with black boxes" and arguing that they have led to "completely implausible and absurd results." He contended that these provisions "go against the letter and the spirit of the law."
TikTok Alleges Discrimination and Double Counting
ByteDance-owned TikTok, the popular Chinese online social media platform, echoed Meta's criticisms. TikTok's lawyer, Bill Batchelor, told the court, "What has happened here is anything but fair or proportionate. The fee has used inaccurate figures and discriminatory methods."
Batchelor specifically alleged that the Commission had inflated TikTok's fees, effectively forcing the company to pay not only for itself but also for other platforms, while disregarding the established excessive fee cap. He accused regulators of "double counting" users, claiming that individuals switching between their mobile phones and laptops were being counted twice, a practice he deemed discriminatory. Furthermore, Batchelor asserted that regulators had exceeded their legal authority by setting the fee cap at the level of group profits rather than individual entities.
Commission Defends Methodology
In response to the accusations, Commission lawyer Lorna Armati staunchly rejected the arguments put forth by both Meta and TikTok. She defended the Commission's use of group profit as a reference value for calculating the supervisory fee.
Armati explained to the court that "When a group has consolidated accounts, it is the financial resources of the group as a whole that are available to that provider in order to bear the burden of the fee." She also maintained that the providers had sufficient information to understand the Commission's calculations, asserting that there was no breach of their right to be heard or any unequal treatment.
The General Court is expected to deliver its ruling on these cases next year. The specific cases are identified as T-55/24 Meta Platforms Ireland v Commission and T-58/24 TikTok Technology v Commission. The outcome of these legal challenges could significantly impact the future of regulatory fees for large online platforms operating within the European Union.