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Investing.com -- Meta Platforms (NASDAQ:META) and TikTok challenged the European Union’s supervisory fee in Europe’s second highest court on Wednesday, arguing the charges are disproportionate and calculated using flawed methodology.
Under the Digital Services Act (DSA) that became law in 2022, these companies are among 18 tech firms subject to a supervisory fee of 0.05% of their annual worldwide net income. The fee is designed to cover the European Commission’s costs for monitoring compliance with the law.
The fee calculation is based on each company’s average monthly active users and their profit or loss in the previous financial year.
Meta’s lawyer Assimakis Komninos told the five-judge panel at the General Court that the company isn’t trying to avoid paying its fair share, but questioned how the Commission calculated the levy. He claimed it was based on the revenue of the entire group rather than the specific subsidiary.
"The provisions in the Digital Services Act, or DSA, go against the letter and the spirit of the law, are totally untransparent with black boxes and have led to completely implausible and absurd results," Komninos stated.
ByteDance-owned TikTok expressed similar concerns through its lawyer Bill Batchelor, who told the court: "What has happened here is anything but fair or proportionate. The fee has used inaccurate figures and discriminatory methods."
Batchelor accused the Commission of double counting users, arguing this was discriminatory because users switching between mobile phones and laptops would be counted twice. He also claimed regulators exceeded their legal authority by setting the fee cap at the level of group profits.
Commission lawyer Lorna Armati defended the EU’s approach, stating that when a group has consolidated accounts, "it is the financial resources of the group as a whole that are available to that provider in order to bear the burden of the fee."
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