Meta Platforms is challenging the financial framework underpinning Britain’s online safety regulations, arguing that the country’s communications watchdog has adopted an excessively broad approach to calculating fees and potential penalties for technology companies.
The legal proceedings began Tuesday in London’s High Court, according to Reuters reporting. The dispute centers on Ofcom’s decision to use companies’ qualifying worldwide revenue, rather than revenue generated specifically in Britain, when assessing regulatory charges and establishing maximum fines.
The case could have significant financial implications for major technology companies operating in the UK, where authorities have introduced stricter obligations governing harmful and illegal online content.
Under Britain’s Online Safety Act of 2023, Ofcom can impose penalties of up to 10% of a company’s qualifying global revenue or £18 million ($23.9 million), whichever is greater. The regulator also has authority to recover the costs of administering the online safety framework through fees imposed on qualifying businesses.
Meta, which owns Facebook, Instagram and WhatsApp, contends that Ofcom has interpreted its legal authority too broadly, according to Reuters.
In submissions to the court, the company argued that the regulator’s definition of qualifying worldwide revenue could expose businesses to financial penalties disproportionate to their activities in the British market.
The company also disputes the methodology used to determine potential penalties when multiple services belonging to the same corporate group are held jointly responsible for regulatory violations.
Meta’s position is that financial obligations should more closely reflect the particular services and jurisdictions subject to regulation.
Ofcom has rejected the suggestion that its approach is excessive.
According to Reuters, the regulator argued in court filings that its revenue calculations reflect a proportionate interpretation of the law. It maintained that global revenue establishes the upper limit for potential penalties rather than determining the amount a company would automatically be required to pay.
Related: Meta, TikTok and X Fight UK Watchdog’s Data Demands
Any financial sanction, Ofcom said, must be assessed against the seriousness of the underlying violation.
The disagreement highlights growing tensions between major US technology companies and British regulators as the government implements one of its most extensive online safety frameworks.
The legislation requires digital platforms to assess risks associated with illegal content and strengthen protections for children. Companies that fail to meet their obligations can face enforcement action, including substantial financial penalties.
The latest court proceedings come amid a broader series of regulatory disputes involving Meta.
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On Oct. 6, Ofcom launched an investigation into whether the company had adequately evaluated potential safety risks before introducing Instagram Instants, a feature allowing users to share content that disappears after being viewed.
According to Reuters and an official Ofcom announcement, the investigation concerns whether Meta fulfilled its obligations to assess risks involving illegal content and potential harm to children before the feature’s May launch.
Meta has said it conducted a risk assessment before releasing the feature and informed Ofcom about it on multiple occasions, according to Reuters.
The company is also involved in a separate legal dispute alongside TikTok and Elon Musk’s X over the scope of information Ofcom has demanded from online platforms as part of its regulatory oversight.
That case, reported by Reuters on Oct. 5, concerns detailed information requests about content moderation practices and users’ exposure to harmful material.
The multiple challenges illustrate the legal difficulties facing British authorities as they seek to enforce online safety requirements across technology companies with international operations.
For Meta, the immediate dispute is not about whether online platforms should be regulated, but about the financial basis on which that regulation is enforced.
The company said it remains committed to working with Ofcom while maintaining that fees and penalties should be tied to regulated services in the countries where those services operate, according to Reuters.
Ofcom, meanwhile, has indicated that it intends to defend its regulatory decisions against the legal challenges brought by technology companies.
The High Court proceedings will test the extent of the regulator’s authority to apply global revenue measures when administering a law designed to protect users in Britain.
A ruling in Meta’s favor could require Ofcom to reconsider elements of its financial methodology. A decision supporting the regulator would reinforce its ability to use worldwide revenue as a benchmark for charges and potential sanctions under the Online Safety Act.
Source: Reuters
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