Meta Takes Legal Stand, Challenges EU Fee As It Battles Regulatory Scrutiny

Meta Platforms Inc META has contested a supervisory fee set at 0.05% of its annual global net income, which will likely fund the European Union regulators’ efforts in monitoring compliance with the new EU Digital Services Act (DSA). 

This Act mandates that companies, including Meta, enhance their content policing measures. 

The European Commission identifies this levy as applicable to 20 large online platforms and two significant online search engines, including Alphabet Inc GOOG GOOGL Google, Apple Inc AAPL, and TikTok, alongside Meta, Reuters reports.

Also Read: EU Cracks Down on Tech Giants: Apple, Alphabet, and Qualcomm in Regulatory Spotlight

The annual fee calculation depends on each company’s average monthly active users and its financial performance in the previous year, specifically whether it reported a profit or a loss. 

Meta has disagreed with the calculation method used for determining the fees. 

The company points out an issue where businesses that report a loss are exempt from the payment, regardless of their large user base or the regulatory burden they impose. 

This exemption leads to a situation where some companies contribute nothing, causing an unfair distribution of the total fee burden among the remaining entities.

In response to this disagreement, Meta has taken legal action by filing a challenge against the levy in the General Court based in Luxembourg, which stands as Europe’s second-highest court. 

The EU regulator has also been at loggerheads with companies like Microsoft Corp MSFT over issues ranging from the terms of its cloud service to its $13 billion investment in ChatGPT parent OpenAI.

The EU regulator also sought information from 17 tech behemoths, including Apple, Amazon, Microsoft, and Meta, under the EU’s Digital Services Act (DSA).

Price Action: META shares traded lower by 0.37% at $467.84 on the last check Thursday.

Also Read: Social Media Outlook For 2024: Meta Platforms Faces Uncertain Growth While Pinterest and Snap Shine in Analyst Ratings

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Mark Zuckerberg Photo by Frederic Legrand – COMEO on Shutterstock