Meta and TikTok have secured a major legal victory against the European Commission over the methodology used to calculate supervisory fees under the Digital Services Act (DSA), in a ruling that could have implications for other tech giants operating in the European Union.
As Reuters reports, the Luxembourg-based General Court ruled on Wednesday, September 10, that EU regulators must revise their fee calculation methodology within 12 months.
“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 judges stated in their decision.
While the court upheld the companies’ challenge to the methodology, it did not order the repayment of the 2023 fees already collected, pending the reformulation of the levy system by regulators.
The supervisory fee, currently set at 0.05% of annual worldwide net income, is intended to cover the Commission’s costs of monitoring compliance with the Digital Services Act, which entered into force in November 2022.
Companies’ Arguments
Meta and ByteDance’s TikTok initiated legal action after being charged fees tied to their number of average monthly active users and financial performance. Both companies argued the methodology was flawed and resulted in disproportionate fees.
“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, leaving others to pay a larger and disproportionate amount of the total,” a Meta spokesperson noted following the ruling.
TikTok, which recently announced it had surpassed 200 million monthly users across Europe, welcomed the decision and indicated it would “closely follow the development of the delegated act.”
Commission Response
The European Commission characterized the ruling as primarily procedural, emphasizing that the court had confirmed its fee methodology as fundamentally sound.
“The Court’s ruling requires a purely formal correction on the procedure. We now have 12 months to adopt a delegated act to formalise the fee calculation and adopt new implementing decisions,” a Commission spokesperson said in a statement.
Regulatory Context
This legal challenge comes amid intensifying regulatory scrutiny of major tech platforms in Europe. In April, the Commission issued its first penalties under the Digital Markets Act (DMA), fining Apple €500 million and Meta €200 million for violations related to app store restrictions and data consent practices, respectively.
TikTok faces additional regulatory challenges, including a separate DSA investigation concerning its advertisement transparency. The platform was recently informed of preliminary findings that it may have breached DSA requirements by failing to provide an adequate advertisement repository.
Other tech companies subject to the DSA supervisory fee include Amazon, Apple, Booking.com, Google, Microsoft, X, Snapchat, and Pinterest.
David Adler is an entrepreneur and freelance blog post writer who enjoys writing about business, entrepreneurship, travel and the influencer marketing space.
