Meta has initiated legal proceedings against the UK's media regulator, Ofcom, contesting the fee and fines structure established under the Online Safety Act. The parent company of Facebook and Instagram argues that the current methodology, which bases charges on global revenue, is disproportionate and flawed.
Meta's Legal Challenge
The tech giant is seeking a judicial review in the High Court, claiming that fees and potential penalties should be calculated based on the revenue generated within the country of regulation. Under the Online Safety Act, breaches can result in fines of up to 10% of qualifying worldwide revenue (QWR) or £18 million, whichever is greater. For Meta, which reported revenues of $201 billion last year, this could theoretically lead to a fine of up to $20 billion.
Ofcom's Fee Regime
Since September, Ofcom's fees have also been tied to a proportion of an organisation's QWR, applying to businesses with annual QWR exceeding £250 million. Meta contends that this approach disproportionately burdens large tech companies and does not reflect the scope of services regulated in the UK.
Monica Carss-Frisk KC, representing Meta, described Ofcom's approach as “troubling” in court documents. She argued that it would result in companies like Meta bearing the majority of Ofcom's costs, despite the Act aiming to regulate a broad range of internet services in the UK. She further noted that QWR is not linked to revenue from specific UK services, meaning global revenue counts toward the threshold even if the service is only partially offered in the UK.
Ofcom's Defence
Ofcom has stated that its fee and fines regime is based on a “plain reading of the law” and that it will “robustly defend” its decisions. A hearing is scheduled for 13-14 October.
Meta is not the first US tech firm to challenge Ofcom over the Online Safety Act. The website 4chan has refused to pay fines, and the operators of 4chan and Kiwi Farms have also sued the regulator. The Act has faced criticism from the Trump administration.
Funding Shift
Ofcom's new fee schedule, implemented this year, charges online service providers like Meta tariffs to cover enforcement of the Act. These fees apply to companies with revenue from user-generated content, search, or pornography, and with turnover of approximately £250 million or more. This marks a significant shift in Ofcom's funding, moving from radio bandwidth license fees to contributions from large tech firms. Ofcom's projected revenue for this year is £233 million, with £164 million coming from these tariffs.
