Meta is fighting UK media regulator Ofcom in the High Court in London over how regulatory fees and penalties are calculated under Britain’s Online Protection Act. The legal challenge focuses on a fundamental disagreement: should Ofcom’s costs and potential fines be based on Meta’s global revenues or only on revenues generated from UK-regulated services? This dispute has huge financial stakes for all technology companies operating in Britain.
Ofcom bases regulatory fees on a provider’s “qualified worldwide revenues”, a metric that captures total global earnings, regardless of where they are generated.
Meta argues that this approach is disproportionate and unfair. “We believe that fees and fines should be based on the services being regulated in the countries where they are regulated,” a Meta spokesperson said.
This difference is economically important, as a fee based on global income would mean a significant increase in regulatory fees. However, Meta indicated that even under its proposed approach, “Ofcom could still impose the highest fine in UK corporate history.”
The 2023 Online Safety Act gives Ofcom sweeping regulatory powers, including the ability to fine companies up to 10% of their global qualifying income.
The law obliges Ofcom to cover all its operating expenses through charges levied against service providers. The combination of fines as well as cost recovery fees for user security exposes the platform to substantial monetary risks. However, Meta’s case challenges the methodology for calculating such charges rather than the need for them.
According to Ofcom’s legal counsel appearing before the High Court, the regulator will “issue invoices for the fees in the third quarter of this year, possibly in September.”
