Meta and TikTok Triumph in Tribunal Over EU Tech Tax

Meta and TikTok have secured a major victory in their legal challenge against the annual supervisory fee imposed under the European Union’s Digital Services Act (DSA), according to a report by Reuters.

In its ruling on Wednesday, the General Court in Luxembourg declared that the current method of calculating the fee is flawed and directed the European Commission to devise a new system within the framework of delegated acts rather than by unilateral decision.

Under the DSA, the supervisory fee is levied to cover the cost of monitoring large online platforms, based on the number of monthly active users and the previous year’s profit-and-loss statements. Meta and TikTok argued that the flawed formula forced them to pay excessive fees, a claim the court upheld.

As a result of the ruling, the Commission must establish a new procedure for determining fees within the next 12 months. However, fees already paid for 2023 will not be refunded. The Commission stated that while the core policy will remain intact, procedural corrections must be made.

Following the ruling, TikTok announced that it would closely monitor progress on the new legislation. Meta, for its part, criticized the current framework under which companies with large user bases but operating losses are exempt from the fee. “We hope the new rules will address these inconsistencies,” Meta said.

Alongside Meta and TikTok, other major platforms including Amazon, Apple, Booking.com, Google, Microsoft, X (formerly Twitter), Snapchat, and Pinterest are also subject to the supervisory fee.

The DSA, which came into force in November 2022, mandates that large online platforms take stronger measures against illegal and harmful content. Non-compliance could result in fines of up to 6 percent of global annual revenue.