Meta is disputing the fees it must pay to European regulators tasked with enforcing tough new content moderation rules under the Digital Services Act, Reuters reported.
The law sets the fee at 0.05% of a company's annual net global sales and is intended to cover the costs of European regulators tasked with monitoring compliance with the bloc's new rules.
Meta was not willing to cover these costs because insolvent companies do not have to pay when they are in trouble, but the amount of 11 million euros (about 11.9 million US dollars).
“We disagree with the methodology used to calculate these fees,” said Ben Walters, Meta's EMEA policy spokesperson.
“Businesses currently reporting losses will not pay these fees, even if they have a large user base or incur significant regulatory burdens, meaning some companies will pay nothing while others will pay disproportionately to the total amount,” he added.
Twenty companies deemed very large platforms under the Digital Services Act are expected to provide funding to the EU to implement new regulations.
Meta is classified as a very large platform with at least 45 million monthly active users in the European Union.
The law spreads implementation costs, meaning companies with large numbers of users pay more unless they are unprofitable.
This means that Meta and Alphabet will have to pay about three-quarters of the annual implementation costs, or 45.2 million euros (48.7 million US dollars).
Under the law, Meta must pay 11 million euros (about $11.9 million), while Alphabet must pay 22 million euros (about $23.8 million).
With the tax set at 0.05% of a company's annual global profit in 2022, companies like X and Amazon may not pay it, even if they use the EU resources needed to control the tax. Compliance with the Digital Services Act.
X is under formal investigation by the European Commission for violating the provisions of the Digital Services Act by failing to prevent the publication of illegal content.
In response to Meta's legal challenge, a European Commission spokesman said that companies have the right to appeal. But he stressed that the committee's decision and approach were firm and that they could defend their position in court.
Amazon is also appealing the Digital Services Act, although the challenge relates to its classification as a very large platform rather than specific fees.
An EU spokesman confirmed that all companies had paid their contributions by December 31.
The Digital Services Law came into effect last year and companies have until February 17 to comply.
Companies that do not adhere to these rules could face fines of up to 6% of their annual turnover or even be forced to leave the European Union.