TLDRs;
- Meta and TikTok successfully challenge EU fee calculations, prompting a review of the Digital Services Act methodology.
- The Luxembourg court allows fee methodology overhaul, but 2023 payments remain non-refundable for platforms.
- Disputes reveal challenges in fairly funding EU oversight across diverse global tech companies.
- EU regulators emphasize legal procedure, ensuring methodology changes follow proper legislative processes.
Meta and TikTok have scored a significant procedural victory in their legal challenge against the European Commission over how tech oversight fees are calculated under the EU’s Digital Services Act (DSA).
The Luxembourg-based General Court ruled that the current methodology must be revised within 12 months, requiring the Commission to adopt a “delegated act” rather than administrative decisions.
While the court sided with the tech giants on methodology, it clarified that fees already paid for 2023 would not be refunded. This decision underscores the EU’s focus on legal precision and proper procedure, rather than immediately overturning regulatory fees.
Historically, the EU has not shied away from imposing large fines on tech companies. Google alone has faced $9.5 billion in antitrust penalties since 2017, but procedural correctness remains a cornerstone in digital oversight enforcement.
Flaws in the Fee Calculation Method
The DSA mandates an annual supervisory fee for major online platforms to fund regulatory monitoring. Set at 0.05% of annual global net income, the fee also considers monthly active users and profitability.
However, Meta and TikTok argued that the methodology used by the Commission was flawed, leading to disproportionately high fees.
Meta’s legal team criticized the opaque process, which assessed fees based on consolidated group revenue rather than individual subsidiaries. TikTok added that users could be double-counted across devices, inflating its fee. The court’s ruling acknowledged these procedural flaws, requiring a proper legal framework for fee calculation, without disputing the principle of funding oversight.
Industry-Wide Implications
The current DSA fee methodology affects nine major platforms, including Amazon, Apple, Google, and Microsoft.
A revised methodology could significantly redistribute compliance costs across the tech sector, potentially altering how much each company contributes to EU oversight.
The ruling also highlights broader tensions inherent in regulating global platforms. Companies with varying business models, regional revenues, and user bases face challenges in ensuring fair and proportionate fees. For the EU, striking a balance between robust monitoring and equitable cost distribution remains a complex task.
Procedural Over Substance
Despite the procedural setback, EU regulators maintain that the underlying fee principle is valid. The Commission has publicly stated that the court confirmed the methodology’s sound foundation, emphasizing that the dispute concerns legal process rather than the substance of the fee itself.
This outcome reinforces the importance of legislative precision in EU digital policy. By requiring a delegated act to formalize the revised methodology, the EU ensures transparency, accountability, and legal certainty in its oversight of major online platforms.
