Meta, formerly known as Facebook, is contesting a fee imposed by EU regulators for enforcement of the Digital Services Act’s (DSA) content moderation rules. The company objects to having to bear the burden of the fee, which is set at 0.05 percent of its profits, while loss-making companies are exempt. This discrepancy has prompted Meta to challenge the methodology used to calculate these fees. In response, the European Commission maintains the validity of its decision and methodology and plans to defend its position in court.
According to a Reuters report, Meta is disputing the fee it is required to pay the EU regulators responsible for enforcing the DSA’s content moderation rules. Despite the fee being capped at 0.05 percent of a company’s profits, Meta is unhappy that it has to pay while loss-making companies are exempt. The company’s EMEA policy comms spokesperson, Ben Walters, explains that this approach leads to an unfair distribution of costs, with some companies paying nothing while others bear a disproportionate amount of the total.
Under the DSA, the 20 very large online platforms (VLOPs) are responsible for funding the EU’s enforcement of the new content moderation rules. Meta has been classified as a VLOP due to its 45 million monthly active users in the EU. The enforcement costs are divided based on the number of users, with companies that have more users contributing a higher amount. However, unprofitable companies are exempted from paying. As a result, Meta and Google’s parent company Alphabet are responsible for approximately 75 percent of the annual enforcement bill amounting to €45.2 million (around $48.7 million). Meta’s share of this bill is reported to be €11 million (around $11.9 million), while Alphabet’s share is €22.1 million (around $23.8 million).
The fee’s cap at 0.05 percent of a company’s annual global profits creates a situation where companies like Amazon and X are expected to pay nothing, despite utilizing EU resources to monitor and enforce DSA compliance. X (formerly known as Twitter) is currently under investigation by the European Commission for possible violations of the DSA by failing to prevent the dissemination of illegal content related to Hamas’ terrorist attacks against Israel. This exemption for loss-making companies raises concerns about the fairness of the allocation and the burden borne by Meta and Alphabet.
Meta’s decision to legally challenge the fee has drawn a response from the European Commission. While acknowledging Meta’s right to appeal, the Commission maintains the solidity of its decision and methodology. It intends to defend its position in court. The spokesperson for the European Commission affirmed this stance and emphasized that all companies, including Amazon and Zalando, met the December 31st deadline for paying their fees. The challenges brought forth by Amazon and Zalando pertain to their classification as VLOPs, rather than the specific fees themselves.
The Digital Services Act came into effect last year, and companies are required to achieve compliance by February 17th. Failure to comply may result in fines of up to 6 percent of annual revenue or even expulsion from the EU market. Meta’s challenge to the DSA fee highlights the complexities and potential disparities in enforcing content moderation rules. The outcome of this legal dispute will significantly impact the way companies navigate regulatory obligations and the allocation of costs for maintaining a safe and secure online environment. Overall, the DSA and its enforcement mechanisms remain subjects of ongoing scrutiny and contention as digital platforms strive to strike a balance between compliance, profitability, and fairness.
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