TikTok and Meta, the parent company of Facebook and Instagram, are suing the European Union (EU) over a segment of the Digital Services Act that requires the companies to pay a fee to cover the cost of regulating them.
The Digital Services Act, or DSA, was created to form a single set of rules that would apply over the entire EU to help create a safer digital space as well as establish a level playing field to allow for fair access to innovation and growth. The DSA went into effect last year.
The rules apply to a range of businesses that provide digital services, from simple websites to large online platforms built on the infrastructure of the internet. Under the rules, all designated companies are required to pay a supervisory fee that goes towards covering the cost of oversight, a fee that Meta and TikTok are not keen to pay.
As reported by Politico, the two social media companies don’t like the idea of having to pay to be regulated and have argued that the levy is unfair because it puts too much burden on them. They argue some companies are paying nothing while they are left to pay what they consider to be a disproportionately larger chunk.
The EU is seeking about €45 million in 2024 to regulate how major platforms like Meta and TikTok police their own platforms against illegal and harmful content. While TikTok declined to say how much it was paying into the total (and the EU isn’t publicly publishing how much each company is required to pay), Meta says it was being required to fork over €11 million.
The system is currently set up to ask companies that operate “very large online platforms” and search engines pay more based on user numbers and is capped based on their annual profit. That means companies like X (formerly Twitter), Wikipedia, Pinterest, and others which are reporting very small or no net income aren’t being asked to pay as much as TikTok or Meta, which report a lot.
“Our decision and methodology are solid. We will defend our position in court,” Commission spokesperson Johannes Bahrke says.
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