Meta has launched a legal challenge against Ofcom over its methodology for calculating fees and potential fines under the Online Safety Act. The company argues that penalties should be based on revenue generated within the UK rather than global revenue, as reported by The Guardian, BBC, and Reuters.
Key Takeaways
Meta has filed a legal challenge against UK regulator Ofcom over its methodology for calculating fees and fines under the Online Safety Act. The company argues that penalties should be based on revenue generated within the UK rather than global revenue.
- Meta seeks judicial review of Ofcom’s decision in High Court
- Fees and potential fines are calculated using a company's qualifying worldwide revenue (QWR)
- Under regulations, companies can face fines up to 10% of QWR or £18m, whichever is higher
- A full hearing on the case is expected in October
According to Meta, Ofcom’s approach is disproportionate and could result in fines larger than any imposed by a UK regulator. The company claims that fees should be based on the services being regulated within specific countries, which would still allow for significant penalties as stated by The Guardian. Under regulations introduced in September 2023, companies can face fines of up to 10% of their qualifying worldwide revenue (QWR) or £18m, whichever is higher.
Ofcom has defended its approach, stating that it is based on a 'plain reading of the law'. The regulator said it would robustly defend its reasoning and decisions as reported by The Guardian. A preliminary hearing in London's High Court heard that Fortnite-maker Epic Games and the trade body Computer and Communications Industry Association (CCIA) may seek to intervene in the case, according to BBC.
A full hearing is expected in October. Ofcom’s lawyer Javan Herberg said the regulator intends to issue invoices for fees in the third quarter, most likely in September, and could have to pay refunds if Meta's challenge succeeds as per Reuters. The case raises issues of wide public importance and highlights the ongoing tensions between tech companies and regulators over digital safety standards.
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