Meta and TikTok Score Major EU Court Victory Over Tech Fees - Here’s Why It Matters
Big Tech just dodged a billion-dollar bullet in Brussels.
Meta and TikTok scored a landmark legal victory against the European Union's controversial digital levy—potentially saving billions in compliance costs while dealing regulators a stunning defeat.
The Court's Rationale
Judges ruled the fee structure violated proportionality principles, calling it 'disproportionate burden' on scaling platforms. The decision effectively neuters the EU's attempt to fund digital oversight through direct platform taxation.
Market Impact
While regulators scramble to salvage their oversight budget, tech stocks ticked upward on the news. Another reminder that when courts and commissions collide, legal fees become the most predictable revenue stream in Brussels.
The ruling creates immediate pressure for alternative funding mechanisms—and signals growing judicial pushback against the EU's aggressive tech taxation playbook. Watch for renewed legislative efforts within 12 months.
The ruling is a potential win for TikTok and Meta
On Wednesday, Europe’s second-highest court upheld challenges by Meta Platforms and TikTok against a European Union supervisory fee imposed on them.
Under a Digital Services Act signed into law in 2022, Meta, TikTok and 16 other companies are subject to a supervisory fee which amounts to 0.05% of their annual worldwide net income aimed at covering the European Commission’s cost of monitoring their compliance with the law.
The size of the annual fee is calculated based on the number of average monthly active users for each company and is influenced by the company’s profit or loss margin in the preceding financial year.
TikTok and Meta’s arguments
Meta Platforms and TikTok shared their arguments concerning the subject in June, claiming the European Union supervisory fee levied on them was disproportionate and based on a flawed methodology.
Meta denied trying to avoid paying its fair share of the fee, and questioned how the Commission had calculated the levy, claiming it had been based on the revenue of the group rather than of the subsidiary.
Meta’s lawyer Assimakis Komninos told the panel of five judges that his client was still in the dark about how the fee was calculated. According to him, the provisions in the Digital Services Act, or DSA, “go against the letter and the spirit of the law, are totally untransparent with black boxes and have led to completely implausible and absurd results.”
Streaming platform TikTok shared similar sentiments. “What has happened here is anything but fair or proportionate. The fee has used inaccurate figures and discriminatory methods,” TikTok lawyer Bill Batchelor said.
“It inflates TikTok’s fees, requires it to pay, not just for itself, but for other platforms and disregards the excessive fee cap,” he added.
Batchelor even went as far as accusing the Commission of double-counting the companies’ users, saying this was discriminatory because it WOULD mean users who switch between their mobile phones and laptops would be counted twice.
As far as he is concerned, the regulators have exceeded their legal power by setting the fee cap at the level of group profits.
Commission lawyer Lorna Armati has rejected the companies’ arguments and defended the Commission’s actions.
“When a group has consolidated accounts, it is the financial resources of the group as a whole that are available to that provider in order to bear the burden of the fee,” she told the court.
“The providers had sufficient information to understand why and how the Commission used the numbers that it did and there is no question of any breach of their right to be heard now, unequal treatment,” she added.
The Court is expected to issue its ruling next year.
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