Meta, the parent company of Facebook, is currently challenging the fees it must pay to EU regulators for enforcing content moderation rules. Under the Digital Services Act (DSA), very large online platforms (VLOPs) are required to fund the EU’s enforcement efforts. However, Meta is unhappy with the methodology used to calculate these fees, as loss-making companies are exempt while it is burdened with an €11 million payment.
Spokesperson Ben Walters from Meta’s EMEA policy comms team voiced the company’s disagreement with the fee calculation method. According to Walters, companies that record a financial loss are not required to pay, regardless of their user base or regulatory burdens. This leaves some companies paying nothing, while others, like Meta, are left shouldering a disproportionate amount of the total fees.
The DSA designates the 20 companies with the most users as VLOPs and mandates their financial contribution to enforcement costs. Meta has been labeled a VLOP due to its 45 million monthly active users in the EU. As a result, both Meta and Alphabet, Google’s parent company, are responsible for approximately three quarters of the €45.2 million annual enforcement bill. This translates to €11 million for Meta and €22.1 million for Alphabet, as reported by Bloomberg.
Despite consuming EU resources for monitoring and enforcing DSA compliance, companies like Amazon and X are likely to pay nothing due to the fee cap at 0.05 percent of annual global profits. This raises concerns about an unfair distribution of costs, especially when considering that X, formerly known as Twitter, is currently under investigation by the European Commission for potential DSA rule violations. The investigation relates to the company’s handling of illegal content during Hamas’ terrorist attacks against Israel.
Legal Challenge and Response
Meta’s decision to legally challenge the fees prompted a response from the European Commission. While acknowledging the companies’ right to appeal, the Commission maintained the solidity of its decision and methodology. It expressed its intention to defend its position in court. Additionally, Amazon and Zalando have also challenged the DSA, primarily concerning their designation as VLOPs rather than the specific fees themselves. A spokesperson for the EU confirmed that all companies paid their fees by the December 31st deadline.
Deadline and Consequences of Non-Compliance
The DSA took effect last year, and companies have until February 17th to comply with its provisions. Those failing to meet the requirements could face fines of up to 6 percent of their annual revenue or even a ban from operating in the EU.
Meta’s challenge to the EU content moderation fees reflects concerns over the methodology used to calculate these expenses. The discrepancy in payment requirements between profitable and loss-making companies raises questions about the fairness of the system. The outcomes of Meta’s legal challenge, as well as those of other companies, will have implications for the enforcement of the DSA and the financial obligations placed on VLOPs operating within the EU.
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