Meta Platforms and TikTok have won a significant legal challenge against the European Commission over how Brussels calculated supervisory fees under the Digital Services Act (DSA), the bloc’s landmark content-moderation and platform regulation law.

The Luxembourg-based General Court ruled on Wednesday that EU regulators had employed the incorrect legal mechanism to establish the methodology for the annual supervisory fee imposed on large tech platforms. The court gave the Commission 12 months to reformulate the levy using a delegated act instead of the implementing decisions it had relied on.

Meta and TikTok filed their lawsuits after they were hit with a fee equivalent to 0.05% of their annual worldwide net income. The levy was designed to cover the Commission’s costs of monitoring their compliance with the DSA, which requires “very large online platforms” to take stronger action against illegal and harmful content or risk fines of up to 6% of their global turnover.

Dispute Over Fee Methodology

The supervisory fee is calculated based on two factors: a company’s average monthly active users in the EU and whether it reported a profit or loss in the preceding financial year. Meta and ByteDance’s TikTok argued the system unfairly penalized profitable firms while allowing loss-making rivals with similarly massive user bases to avoid paying altogether, leaving compliant firms shouldering a disproportionate share of the costs.

The General Court agreed that the Commission had erred procedurally.

“That methodology… should have been adopted not in the context of implementing decisions but in a delegated act, in accordance with the rules laid down in the DSA,” the judges wrote.

However, the ruling stopped short of requiring regulators to refund the 2023 fees already paid by Meta and TikTok. The money will remain with the Commission while it drafts a new legal basis for calculating the fee.

The Commission sought to downplay the outcome, emphasizing that the principle of charging supervisory fees — and the amounts involved — remain intact.

“The Court’s ruling requires a purely formal correction on the procedure. We now have 12 months to adopt a delegated act to formalize the fee calculation and adopt new implementing decisions,” a Commission spokesperson said.

TikTok welcomed the judgment.

“We’ll closely follow the development of the delegated act,” a TikTok spokesperson noted.

Meta also issued a measured endorsement, underscoring what it sees as inequities in the current system.

“Currently, companies that record a loss don’t have to pay, even if they have a large user base or represent a greater regulatory burden, leaving others to pay a larger and disproportionate amount of the total. We look forward to the flaws in the methodology being addressed,” a Meta spokesperson said.

Backstory: Why the DSA Introduced Supervisory Fees

The Digital Services Act, which entered into force in November 2022, was one of the EU’s most ambitious regulatory projects since the General Data Protection Regulation (GDPR) of 2018. It was designed to rein in the power of Big Tech platforms and address concerns over illegal trade, hate speech, disinformation, and harmful content circulating online.

To enforce these sweeping obligations, the European Commission needed new financial resources to hire investigators, legal experts, and technical staff. Lawmakers decided that very large online platforms should help fund the system that regulates them, creating the annual supervisory fee as a dedicated revenue stream.

The formula, however, quickly sparked debate. By tying the fee to net global income, the regulation ensured that profitable firms like Meta or TikTok paid more, while loss-making platforms with comparable or even larger user bases — such as X (formerly Twitter) during its turbulent restructuring under Elon Musk — could avoid paying altogether.

That imbalance was precisely what Meta and TikTok challenged in court, arguing that the methodology lacked fairness and transparency.

Wider Implications for Big Tech

The ruling matters not just for Meta and TikTok but for every major online platform falling under the DSA’s scope. Companies required to pay the supervisory fee include Amazon, Apple, Booking.com, Google, Microsoft, X, Snapchat, and Pinterest.

These platforms, classified as “very large online platforms” because of their enormous reach across Europe, face stricter obligations to combat disinformation, monitor illegal transactions, and implement better protections for users. The supervisory fees are meant to fund Brussels’ oversight capacity, ensuring regulators can keep pace with global tech giants.

The cases, filed as T-55/24 (Meta Platforms Ireland v Commission) and T-58/24 (TikTok Technology v Commission), now force the EU executive into a technical rewrite of its fee system. Regulators will need to address not only the legal procedural error identified by the court but also the fairness concerns raised by companies over how costs are distributed.

While Meta and TikTok may have won on legal grounds, the financial impact is limited for now. Both must still shoulder their 2023 fees, and the Commission retains the ability to reimpose similar charges once it reworks its methodology.