Meta is suing Ofcom regarding the fee calculation method for the Online Safety Act.

      The initial invoices are expected to arrive in September. Meta is seeking to have the basis altered prior to that. On Thursday, the High Court was informed that Meta has initiated a judicial review against Ofcom regarding how the regulator determines fees and penalties under the UK’s Online Safety Act.

      While the dispute appears minor on the surface, it is quite significant beneath. Ofcom’s approach charges platforms based on what it terms qualifying worldwide revenue, which pertains to global income associated with a regulated service rather than only the portion from the UK. Fines are similarly structured and can amount to 10% of that international figure. Meta contends, as stated outside the court, that any charges should reflect the nation where the service is regulated.

      In a statement to reporters, a Meta spokesperson expressed, “We and others in the tech sector find Ofcom’s decisions regarding the methodology for calculating fees and potential fines to be excessive. We believe that fees and penalties should be grounded in the services regulated within their respective countries. This approach would still enable Ofcom to impose the largest fines in UK corporate history.”

      Ofcom responded by affirming that the framework was established in the legislation passed by Parliament, and that extensive consultations on its application had taken place. “Disappointingly, Meta is contesting the payment of fees, and any penalties that might be imposed on companies in the future, that are calculated on this basis,” stated the regulator.

      What is truly at stake here is that, from Meta's perspective, the fees are not significant. Ofcom has indicated that the charge will range from 0.02% to 0.03% of qualifying worldwide revenue, with a £250m revenue threshold for liability and a £10m UK-revenue minimum below which providers are exempt. For Meta, this equates to a few tens of millions of pounds annually based on an approximate revenue of $165bn.

      The potential penalties present a more substantial figure. The Online Safety Act allows Ofcom to impose fines on applicable services of up to 10% of qualifying worldwide revenue, mirroring the GDPR's structure. With Meta’s projected figures for 2025, the maximum possible fine could reach around $16bn. How the calculation is approached—using worldwide or UK-only revenue—determines whether the outcome is damaging or not.

      During the court session, Ofcom’s lawyer, Javan Herberg, indicated that the regulator aims to send out the first round of invoices in the third quarter of this year, likely in September. If Meta prevails, it could lead to refunds. The urgency of this matter arises from the fact that a dispute over methodology after invoicing would complicate reclaiming funds that have already been paid.

      Meta's challenge focuses on procedural aspects rather than constitutional issues. The company does not contest the legality of the Online Safety Act but argues that Ofcom's interpretation of “qualifying worldwide revenue” extends beyond what Parliament intended, rendering the resultant calculation disproportionate under public law principles.

      This argument resonates with Meta's ongoing issues in Brussels, where the company contends that the Commission's interpretation of the Digital Markets Act exceeds the bounds of the text.

      At this stage, the High Court will not evaluate the merits of the case. Thursday's hearing was centered on scheduling, refund processes, and the procedural framework of the review. A substantive ruling is not expected until autumn, by which time Ofcom will have already issued the initial invoices.

      If Ofcom succeeds, the methodology will remain intact, aligning the UK regime with the EU’s GDPR and DSA in adjusting penalties based on global revenue. Conversely, if Meta wins, Ofcom will need to reassess its approach; the repercussions could also affect TikTok, X, Snap, Pinterest, and other large platforms that fall under the same regulations. While these platforms have yet to publicly align with Meta's filing, it is believed they share similar concerns.

      Meta has had a contentious relationship with regulatory bodies in both Britain and Europe for some time. The company has accumulated over €2.5bn in EU fines, accounting for more than half of the total GDPR penalties across the bloc, and it has appealed most of these fines. Ofcom’s ongoing investigations into large platforms under the Online Safety Act include a probe into child sexual abuse material (CSAM) on Telegram, along with letters sent in March demanding evidence of further child-safety improvements from platforms like Facebook, Instagram, Roblox, Snapchat, TikTok, and YouTube.

      The judicial review occurs at a pivotal time as the Online Safety Act transitions from its setup phase to active enforcement. Ofcom recently fined 4chan £520,000 in March and AVS Group £1.05m in December for failing to implement age-checks. The issues raised by Meta regarding the revenue calculation are precisely the ones that will influence the next wave of cases, which aligns with criticisms from civil-society groups asserting that the scope of the Online Safety Act is already excessive.

      September will reveal whether