Meta sues UK regulator over online safety act fees

Meta is fighting the UK's media regulator Ofcom in London's High Court over how regulatory fees and penalties are calculated under Britain's Online Safety Act. The legal challenge centres on a fundamental disagreement: should Ofcom's costs and potential fines be based on Meta's global revenue or only on revenue generated from UK-regulated services? The dispute carries enormous financial stakes for all tech companies operating in Britain.

Ofcom bases regulatory fees on a provider's "qualifying worldwide revenue", a metric that captures total global earnings regardless of where they're generated. 

Meta argues this approach is disproportionate and unfair. "We believe fees and penalties should be based on the services being regulated in the countries they're being regulated in," a Meta spokesperson said. 

The difference is important financially, as fees based on global income would mean a significant increase in regulatory fees. However, Meta indicated that even under its proposed approach, "Ofcom could still levy the highest penalties in UK corporate history."

The 2023 Online Safety Act provides Ofcom with wide-ranging regulatory powers, including the ability to fine firms up to 10% of their global qualifying income.

The law further obliges Ofcom to cover all of its operational expenses by means of charges levied against service providers. The combination of fines for user protection as well as the cost recovery charges exposes the platform to substantial monetary risks. Meta's case, however, challenges the methodology for calculating such charges rather than their necessity.

According to the legal counsel for Ofcom who appeared before the High Court, the regulator "will be issuing invoices for fees in Q3 of this year, likely in September."