TikTok becomes second online platform to challenge new EU regulatory fee

TikTok has challenged an EU regulatory fee amounting to 0.05 per cent of its annual worldwide net income to cover costs of monitoring compliance with new European rules, the second company to do so after Meta Platforms.

Under the Digital Services Act, 20 very large online platforms, including TikTok, Meta, Google, Apple and two very large online search engines are required to pay the annual charge.

The size of the fee accounts for the average monthly active users for each company and whether it posts a profit or loss in the preceding financial year.

“We disagree with the fee and are appealing on a number of grounds, including the use of flawed third party estimates of our monthly active user numbers as a basis for calculating the total amount,” a TikTok spokesperson said.

The European Commission will defend its position in court, a spokesperson for the EU executive said in a statement.

“Our decision and methodology are solid,” the spokesperson said.

“The fees were due by 31 December 2023. We can confirm that all very large online platforms [and] search engines in question honoured their commitments.”

Amazon and Elon Musk’s X, both of which posted losses in 2022 are not expected to pay the 2023 fee though the former will have to for this year as it returned to a profit in 2023.