TikTok and Meta have secured a legal victory in the EU’s General Court. The court ruled that the European Commission’s method for calculating supervisory fees under the Digital Services Act (DSA) was legally flawed. However, the companies are not off the hook entirely: the obligation to pay remains while the methodology is reworked (Source: Reuters).
What Happened
- Under the DSA, large platforms deemed “very large online platforms” are required to pay annual oversight (supervisory) fees to help fund EU regulatory compliance. TikTok and Meta were subject to a fee of 0.05% of their worldwide net income.
- TikTok and Meta challenged the way Brussels calculated these fees—specifically how “average monthly active recipients/users” were counted and how profit or loss was factored in. The court found that this crucial piece should have been adopted via a delegated act, not using the simpler path of implementing decisions.
- The ruling gives regulators 12 months to correct the methodology and issue new rules. The fee obligations stay in place during this period.
Why It Matters
- For TikTok, this means more legal clarity around how DSA fees are calculated—important for budgeting and regulatory risk.
- For advertisers and platforms, there’s potential downstream impact: changes in fee methodology might shift how platforms allocate costs, which could influence advertising rates or how regulatory compliance is handled.
- For regulators, the decision underscores that legal formality (how rules are made) matters, not just the substance. Using the correct legislative tools (delegated acts etc.) is essential under EU law.
What to Watch
- How the European Commission responds: will they move quickly to issue a delegated act that fixes the calculation?
- If and how the revised methodology changes the fees for different platforms (especially ones with varying growth/profit profiles).
- What this means for enforcement in other parts of DSA or related EU regulation — transparency, oversight, ad-related obligations etc.
