The companies challenged the fees imposed under the Digital Services Act (DSA) in 2023.
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Social media companies Instagram, Facebook and TikTok needn't pay fees imposed to pay for supervisory costs under the Digital Services Act (DSA), the EU’s General Court ruled on Wednesday, until the European Commission changes its procedure for levying the charges.
The platforms challenged the practice under the DSA, which entered into force in 2023, where the Commission charges annual contributions to providers of the largest online internet platforms to cover their oversight, administrative and human resource costs for supervision and enforcement activities.
These fees are calculated based on a mathematical formula which accounts for each service's number of users but which caps the fee at 0.05% of the provider's worldwide profits from the previous year.
After designating Facebook, Instagram and Tiktok as Very Large Online Platforms (VLOPs) – they have more than 45 million users per month – the EU executive determined the amount of the supervisory fee applicable to each of those platforms in 2023.
The court now annuls the implementing decisions, while maintaining their effects for a provisional period.
The judgment said the Commission calculated the number of average monthly active recipients of the services based on a common methodology. The court added that since the methodology is “an essential and indispensable” element of the determination of the fee, “it should have been adopted not in the context of implementing decisions but in a delegated act.”
The court said the Commission can now set up the methodology for calculating the number of average monthly active recipients “in a manner that complies with the DSA and to adopt new implementing decisions.”
This needs to be done within 12 months from now.
The Commission said in a statement that it takes note of the judgment. “While we await the final details of the judgement, we can already say that the Court confirms our methodology is sound: no error in calculation, no suspension of any payments, no problem with the principle of the fee nor the amount. The companies concerned have to pay the supervisory fee for 2023.”
Euronews reported in March that the EU executive has charged the largest online platform providers in the EU a total of €58.2 million in supervisory fees in 2023.
The report also said that the fees collected in 2023 did not cover all Commission expenses related to the DSA last year, resulting in a deficit of €514,061.
