Meta and TikTok win challenge over EU supervisory fees

The General Court annuls the European Commission’s decisions setting the supervisory fee imposed on Meta and TikTok.

In 2021, the EU adopted the Digital Services Act (DSA), which aims to better protect consumers and internet users from the power of so-called Very Large Online Platforms (VLOPs).

To cover the costs necessary for upholding the DSA, the European Commission collects an annual fee from VLOPs.

To calculate these supervisory fees, in March 2023, the EU’s executive branch adopted a delegated regulation supplementing the DSA detailing the methodologies and procedures.

In November 2023, the European Commission announced the amount of the supervisory fee for Facebook, Instagram, and TikTok for 2023. The size of the annual fee was based on the average monthly active users for each company and profits or losses in the preceding fiscal year.

Both Meta and TikTok’s parent company ByteDance argued that this methodology was flawed, causing disproportionate fees. Therefore, the companies brought the European Commission’s decision before the General Court of the European Union.

In a ruling that was published earlier this week, the General Court sided with Meta and TikTok.

“Since that methodology is an essential and indispensable element of the determination of the supervisory fee, it 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 General Court ruled.

The European Commission now has 12 months to revise its methodology. In the meantime, Meta and TikTok don’t have to pay the supervisory fees.

Meta welcomed the ruling. “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. We look forward to the flaws in the methodology being addressed,” a company spokesperson told Reuters.

A TikTok spokesperson said that the company will “closely follow the development of the delegated act.”