Meta challenges EU fee for content moderation rules

Meta, formerly known as Facebook, is contesting a fee it is obliged to pay European Union (EU) regulators, who are responsible for enforcing the new content moderation rules mandated by the Digital Services Act (DSA). The fee, which is limited to 0.05 percent of a company’s profits, has raised concerns as loss-making companies are exempted from payment. Meta contends that this arrangement is unfair, especially since it is expected to pay around €11 million. The company firmly disagrees with the methodology employed to calculate the fees, arguing that it places an inequitable burden on some companies while others pay nothing.

As outlined in the DSA, the enforcement costs for the new moderation rules are to be funded by the 20 very large online platforms (VLOPs) identified in the legislation. Meta has been classified as a VLOP due to its 45 million monthly active users in the EU. Consequently, Meta and Google’s parent company Alphabet are liable to cover approximately three quarters of the annual enforcement bill, totaling €45.2 million ($48.7 million). This means that Meta will shoulder €11 million ($11.9 million), while Alphabet is responsible for €22.1 million ($23.8 million), according to Bloomberg. However, despite consuming EU resources required for DSA compliance, companies like Amazon and X are expected to pay nothing due to the fee cap, which is limited to 0.05 percent of a company’s annual global profits in 2022.

Meta’s objection to the fee has led to a legal challenge against the European Commission. Ben Walters, Meta’s EMEA policy communications spokesperson, expressed the company’s dissatisfaction with the enforcement cost structure, emphasizing that loss-making companies with a substantial user base or regulatory responsibilities are exempt from payment. Walters contends that this arrangement unfairly burdens compliant companies, who are left to shoulder a disproportionate amount of the total costs. Despite Meta’s legal challenge, the European Commission maintains that its decision and methodology for calculating these fees are sound.

In addition to Meta, other companies such as Amazon and Zalando have also contested the DSA. However, their challenges are focused on their designations as VLOPs rather than the specific fees. It is important to note that all companies paid their respective fees before the December 31st deadline, according to information provided by an EU spokesperson. The DSA law came into effect last year, and companies are required to be fully compliant by February 17th or risk facing fines of up to 6 percent of their annual revenue or even being banned from operating in the EU.

Meta’s legal challenge against the EU fee for content moderation rules under the DSA highlights an ongoing debate regarding the fairness and methodology of these fees. While Meta objects to a fee structure that places an inequitable burden on compliant companies, the European Commission maintains that its decision and methodology for calculating these fees are sound. As the DSA enforcement deadline approaches, it remains to be seen whether further legal challenges will arise, and if any amendments or revisions to the fee structure will be made to address the concerns raised by Meta and other companies.

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