• Meta and TikTok win case over EU fees, regulators given 12 months to make changes.
• Forces EU to rework its DSA fee system.

Meta and TikTok scored a legal victory on Wednesday against the European Commission over the way supervisory fees were calculated under the EU’s new Digital Services Act (DSA). But while the ruling requires regulators to fix their method, the two platforms will not get back the money already paid.

The case centred on a supervisory fee of 0.05% of each company’s annual global net income. The charge was introduced to cover the Commission’s costs in overseeing compliance with the DSA, which came into force in November 2022. For large platforms, the fee can add up to millions of Euros each year.

The Commission set the size of the fee using two factors: the number of average monthly users and whether a company reports a profit or loss in the previous financial year. That approach, Meta and TikTok argued, unfairly shifted the burden onto some firms while letting others with equally-large user bases avoid payment if they recorded losses.

Both companies challenged the levy, saying the calculation method was flawed and had left them with a disproportionate bill.

Court sides with platforms

The Luxembourg-based General Court agreed with their reasoning. Judges said the Commission had used the wrong kind of legal instrument when it set out the fee structure. Instead of relying on implementing decisions, it said the rules should have been introduced through a delegated act, a process that carries different procedural requirements under EU law.

“That method […] 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 ruling said.

The decision gives regulators 12 months to draw up a new legal basis and issue revised rules. Until then, the Commission’s current approach remains in place, meaning Meta and TikTok will not receive refunds for the 2023 fees.

Commission response

The Commission emphasised that the court’s ruling does not undermine the principle of the fee itself. A spokesperson said: “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.”

Officials also noted that the court did not question the need for the levy or the amounts companies were required to pay.

Reactions from companies

TikTok welcomed the ruling, saying it would follow proceedings closely as the Commission works on a delegated act. A Meta spokesperson echoed the sentiment, saying, “We look forward to the flaws in the method being addressed.”

Broader context

The DSA is one of the EU’s most ambitious attempts to regulate online platforms. It requires very large services to step up monitoring of harmful and illegal content or face fines of up to 6% of their annual global turnover. The supervisory fee is designed to fund the Commission’s new role as enforcer, ensuring it has the resources to oversee dozens of major companies.

The ruling could have ripple effects for other tech giants. Alongside Meta and TikTok, companies like Amazon, Apple, Google, Microsoft, Booking.com, Pinterest, Snapchat, and X are all required to pay the levy. Some of these firms may also take issue with how the fee is calculated if the Commission does not adjust the method in a way that spreads costs more evenly.

For now, Meta and TikTok’s victory is limited to forcing regulators back to the drawing board. But with a year to revise the rules, the outcome could reshape how costs are shared among the biggest platforms doing business in Europe, albeit in a timespan longer than the Commission expected.

The cases were registered as T-55/24, Meta Platforms Ireland v Commission, and T-58/24, TikTok Technology v Commission.

Want to experience the full spectrum of enterprise technology innovation? Join TechEx in Amsterdam, California, and London. Covering AI, Big Data, Cyber Security, IoT, Digital Transformation, Intelligent Automation, Edge Computing, and Data Centres, TechEx brings together global leaders to share real-world use cases and in-depth insights. Click here for more information.

TechHQ is powered by TechForge Media. Explore other upcoming enterprise technology events and webinars here.