Meta Platforms and TikTok have filed legal challenges against a European Union supervisory fee, claiming that the calculation method is flawed and disproportionate.

These cases were presented to the General Court of the European Union on June 11, 2025.

The fee, implemented under the Digital Services Act (DSA) in 2022, is set at 0.05% of a company’s annual worldwide net income.

It aims to cover the European Commission’s costs of monitoring compliance with the legislation. The calculation is based on the average number of monthly active users and the company’s profit or loss from the previous financial year.

Meta’s lawyer, Assimakis Komninos, questioned the transparency of the fee calculation. He said that it relies on group revenues instead of subsidiary earnings.

TikTok’s lawyer, Bill Batchelor, criticized the fee as “inaccurate and discriminatory.” He claimed that the Commission double-counted users accessing the platform on different devices.

The European Commission defended its methodology. Lawyer Lorna Armati said that using group profits was appropriate, as it reflects the financial resources available for the fee.

She also noted that the companies had been provided with sufficient information regarding the calculations.

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: Reuters

🧠 Food for thought

1️⃣ The evolving economics of EU tech regulation

The DSA supervisory fee of 0.05% of global income represents a new approach to funding tech regulation, distinct from previous EU frameworks that used different models.

The EU has historically funded regulatory oversight through various mechanisms, with the Digital Services Act introducing this specific fee structure for very large online platforms (VLOPs) with over 45 million users 1.

This fee model reflects the EU’s broader strategy to make platforms bear the costs of their own regulation, similar to how financial institutions fund their supervisory authorities in many jurisdictions.

What makes this case significant is that it challenges the methodology rather than the principle itself. Meta acknowledged it wasn’t trying to avoid paying “its fair share” but questioned the calculation method, highlighting the complex balance between regulatory funding needs and fair burden distribution.

The legal challenge comes amid findings that EU fines against U.S. tech companies totaled $2.03 billion in 2023 alone, raising questions about the cumulative financial impact of the EU’s regulatory framework on primarily American platforms 2.

2️⃣ Transparency challenges in regulatory cost allocation

The dispute highlights fundamental disagreements about how regulatory costs should be calculated and allocated across global tech companies operating in multiple jurisdictions.

Meta’s lawyer specifically described the fee calculation as having “black boxes” that produced “completely implausible and absurd results,” pointing to a broader issue of regulatory transparency that affects compliance across various digital regulations 1.

The disagreement over using group-level versus subsidiary-level financials reflects the inherent complexity of regulating multinational tech companies whose corporate structures span numerous jurisdictions.

This case is significant because the DSA applies to all online intermediaries operating in the EU regardless of where they’re headquartered, making the fee calculation methodology a potential precedent for how costs are allocated for cross-border digital regulation 3.

The outcome could influence how regulatory fees are structured not just for content moderation under the DSA, but potentially for other emerging tech regulations where the question of fair cost allocation remains unresolved.

3️⃣ User metrics as regulatory benchmarks

TikTok’s complaint about “double counting” users who switch between devices reveals a significant technical challenge in designing regulatory frameworks for digital platforms.

The DSA designates platforms as “very large” based on having over 45 million EU users, making user metrics not just a business KPI but a regulatory threshold that triggers substantial compliance obligations 1.

This dispute highlights the difficulty of creating fair measurement standards for digital services where traditional regulatory metrics (like revenue or market share) may not fully capture a platform’s reach or impact.

The debate about how to count users accessing services across multiple devices points to a broader challenge for regulators worldwide: establishing consistent, fair measurement methodologies that reflect actual platform usage without imposing disproportionate burdens 4.

By challenging these methodologies, platforms are not just disputing fee amounts but potentially influencing the fundamental metrics that will define digital regulation for years to come.

……