Meta and TikTok owner ByteDance are not keen on the idea of paying the European Union to regulate them. The companies have challenged a supervisory fee set forth by EU moderators, who are now required to monitor Meta, TikTok, and other major platforms under the Digital Services Act (DSA), Politico reports. Meta first announced its action, with ByteDance following suit a day later.
Under the current arrangement, all designated companies must split the €45.2 million ($48.7 million) that EU’s regulators argue is necessary to properly supervise the 20 Very Large Online Platforms and two Very Large Online Search Engines (VLOSEs). Each regulated platform has 45 million or more users with its financial contribution based on the size of that number. They also can’t owe more than 0.05 percent of its 2022 net profits. However, companies like Amazon and Pinterest that reported little to no profits won’t owe anything. Meta, on the other hand, got a €11 million ($11.9 million) bill under the current arrangement. ByteDance has not publicly announced how much it owes.
Meta takes issue with the European Union regulators’ methodology for choosing each company’s 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, which means some companies pay nothing, leaving others to pay a disproportionate amount of the total,” a Meta spokesperson remarked. Failure to comply with the fee could lead to a fine of up to six percent of a company’s global revenue.
The DSA went into effect in 2023, with Meta’s and ByteDance’s VLOP designations came alongside other major sites, like Google and X, formerly known as Twitter. Along with the fee, VLOPs must comply with specific regulations like transparent advertising and content moderation, sharing data with the European Commission and cooperating with an annual independent audit.