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Meta and TikTok have filed legal complaints against the EU's European Commission this week because neither company supports the new annual fee that funds the Commission's content moderation enforcement efforts.
The EU Digital Services Act (DSA) was rolled out last year in an effort to help make massive social media platforms like Meta and TikTok safer platforms overall. But the new law also means that these platforms—among many others like YouTube, X, Pinterest, and Snapchat—must cover the EU's enforcement costs if their businesses are profitable.
Each company is expected to fork over an amount no greater than 0.05% of its annual profits to fund the EU's moderation efforts. This means that companies in the black will have to pay, but unprofitable platforms are exempt from funding the initiative.
Under the new rules, Meta could be expected to pay roughly $11.8 million this year, Politico first reported.
TikTok has not shared what it expects to be charged for EU enforcement this year, but reportedly said that the Commission's method is "flawed" because of the way it's tallying costs.
Like TikTok, Meta has also publicly criticized the new fees.
"We support the objectives of the DSA and have already introduced a number of measures to help us meet our regulatory obligations, but we disagree with the methodology used to calculate these fees," a Meta representative told PCMag via email.
"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, which means some companies pay nothing, leaving others to pay a disproportionate amount of the total," they added.
PCMag has reached out to TikTok for comment.
"It is the right of companies to appeal," a representative for the European Commission told PCMag via email. "However, our decision and methodology are solid. We will defend our position in court."
But the Commission also noted that all of the companies it required these fees from last year, including TikTok and Meta, have already paid for 2023.
"We can confirm that all Very Large Online Platforms / Search Engines in question honored their commitments," the rep said of last year's fees.
The Commission also pointed to additional information that notes that the fee is intended to "reflect and be proportionate to the economic capacity of the provider" and is "not meant as a penalty."
Last year, Meta announced an ad-free subscription service for EU users as part of its efforts to comply with new laws in the region. It will also allow EU users to unlink their Facebook and Instagram accounts.
And when it comes to content moderation, Meta shared this week that it's taking steps to identify and label AI-generated images at scale to help users better understand what's real and what's fake across Facebook, Instagram, and Threads. It's worth noting, however, that Meta will only be able to label content that complies with existing AI metadata labeling standards.
While the DSA is relatively new, the EU has already launched an investigation last year into how X, formerly known as Twitter, has handled "the dissemination of illegal content" relating to Hamas' attacks in Israel.
Editor's Note: This story has been updated with comment from Meta.