TikTok, the Chinese online social media giant, has taken a stand against a supervisory fee imposed by EU regulators, marking the second company to challenge the levy following Meta Platforms’ lead. Under the Digital Services Act (DSA), TikTok, along with 19 other very large online platforms, is mandated to pay an annual charge to cover the costs of EU regulators’ oversight of compliance with new EU rules.
The fee, amounting to 0.05% of TikTok’s annual worldwide net income, has sparked contention. A TikTok spokesperson voiced their disagreement, citing concerns over the methodology used for calculating the fee. The spokesperson highlighted the use of purportedly flawed third-party estimates of monthly active user numbers as a basis for determining the total amount.
In response, the European Commission has stood firm, asserting the solidity of its decision and methodology. A spokesperson for the EU executive emphasized the commission’s commitment to defending its position in court.
The deadline for payment of the fees was December 31, 2023, with assurances from the European Commission that all the concerned Very Large Online Platforms/Search Engines honored their commitments. Notably, companies such as Amazon and Elon Musk’s X, which incurred losses in 2022, are exempt from paying the 2023 fee. However, Amazon, having returned to profitability last year, will be obligated to pay for the current year.
This dispute underscores the evolving landscape of regulation in the digital sphere and the ongoing tensions between tech giants and regulatory bodies. As TikTok and Meta challenge the supervisory fee, the outcome of this legal battle will likely have significant implications for the relationship between online platforms and EU regulators.