Meta challenges supervisory fee established under the EU’s DSA

Meta has filed a complaint before the General Court of the Court of Justice of the European Union (CJEU), challenging the supervisory fee provision under the EU Digital Services Act (DSA).

Article 43 of the DSA establishes that the European Commission shall charge providers of very large online platforms (VLOPs) and of very large search engines (VLOSE) an annual supervisory fee upon their designation. When charging that fee, the European Commission should consider the providers’ costs incurred in the previous year that do not exceed 0.05% of the worldwide annual net income. Additionally, the supervisory fee should be proportionate to the number of average monthly active users of the VLOPs. In plain language, providers who show that they lost profit or active users during the preceding year are not obligated to pay the supervisory fee. Considering that the Commission designated Meta a VLOP for Instagram and Facebook, and its services did not show a loss of income, it must pay the supervisory fee.

Meta is challenging the supervisory fee provision of the DSA because of the alleged unfair calculation conducted by the Commission. Meta spokesperson stated that this is mainly for providers, including Amazon, Snapchat, Pinterest, and Wikimedia, designated as VLOPs and representing a greater regulatory burden; they do not have to pay the supervisory fee because they reported a loss.

At the same time, the EU’s spokesperson stated that the supervisory fees are calculated proportionately to the economic capacity of the provider. Additionally, it was emphasised that the aim is to ensure effective enforcement mechanisms and monitoring without affecting the providers’ business operations. While the DSA will enter into force by 17 February 2024, it already applies to a sub-set of VLOPs, including Meta, Google, and Apple.

Why does it matter?

The supervisory fee is part of the DSA to enhance the monitoring of online services and combat harmful and illegal content. Therefore, the outcome of this complaint could have broader implications on the liability of the online services in ensuring their compliance with the EU law.