Home Technology Meta and TikTok challenge EU tax for content moderation

Meta and TikTok challenge EU tax for content moderation

by Andrew

Meta and TikTok’s owner ByteDance aren’t keen on the idea of paying the European Union for regulating their platforms. The two companies have in fact challenged the supervision fee imposed by the EU, intended to fund the work of moderators who, under the Digital Services Act (DSA), must monitor Meta, TikTok and other major sites. The news, reported by Politico, sees Meta as the first company to file an appeal, followed by ByteDance a day later.

The DSA stipulates that all designated companies, i.e. those with more than 45 million active users in the EU, must contribute to a common fund of €45.2 million intended to supervise the 20 “Very Large Online Platforms” (VLOPs) and the two “Very Large Online Search Engines” (VLOS). Each platform’s contribution is calculated based on the number of users and cannot exceed 0.05% of 2022 net profits. As a result, companies like Amazon and Pinterest, which have reported little or no profits, won’t have to pay anything. Meta, on the other hand, has received a “bill” of 11 million euros, while ByteDance has not yet disclosed its amount.

The main reason for Meta’s appeal relates to the methodology used by the EU to calculate each company’s contribution. “Currently, loss-making companies don’t have to pay, even if they have a large pool of users or represent a greater workload for regulation, meaning that some companies pay nothing, leaving others with the burden of covering a disproportionate portion of the total,” a Meta spokesperson said. Failure to comply with the tax could result in a fine of up to 6% of the company’s global turnover.

The DSA went into effect in 2023 and designated Meta and ByteDance as VLOPs along with other notable sites, such as Google and X (formerly Twitter). In addition to the fee, VLOPs must comply with specific regulations regarding advertising transparency, content moderation, data sharing with the European Commission, and collaboration with an annual independent audit. It remains to be seen whether Meta and ByteDance’s appeal will be upheld by the EU and how it will impact the other companies involved.

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