Meta challenges Ofcom fee and fine calculations under UK online safety rules

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Meta challenges Ofcom fee fines

Highlights

Meta challenges Ofcom in London's High Court over the use of worldwide versus UK revenue to determine fees and fines under the Online Safety Act.
Meta disputes Ofcom's authority to calculate fines at up to 10% of qualifying worldwide revenue or £18 million, arguing that this drives higher penalties.
Ofcom faces simultaneous scrutiny after investigating Meta's risk assessment for Instagram Instants and confronting legal challenges from Meta, TikTok, and X over regulatory information requests.

High Court dispute over revenue basis

As reported by Reuters, the case opens in London's High Court on Tuesday and centres on Ofcom's use of worldwide rather than UK revenue to determine fees and maximum potential fines under the Online Safety Act.

The 2023 law allows Ofcom to impose fines of up to 10% of qualifying worldwide revenue, or 18 million pounds, whichever is greater, and to recover the cost of running the regime through fees linked to revenue. Meta argues that the regulator exceeds its statutory powers by defining qualifying worldwide revenue as broadly as possible, with the effect of driving the highest potential penalties.

Meta is also challenging Ofcom's method for calculating fines when two or more providers owned by the same organisation are found jointly liable for breaches. Ofcom says its approach is proportionate and strikes a careful balance, adding in its court submission that worldwide revenue is used only to set the maximum potential penalty and that any actual fine must remain proportionate to the failure.

Broader regulatory pressure on large tech groups

The legal challenge comes a week after Ofcom opens an investigation into whether Meta properly assessed the risks posed by its Instagram Instants feature before launching it in May.

Meta is also contesting Ofcom on other fronts. The company joins TikTok and X in a separate legal hearing last week over the amount of information the regulator is demanding.

Meta says it remains committed to cooperating constructively with Ofcom, but argues that fee and penalty calculations should be based on the services being regulated in the countries where they are regulated. Ofcom says it has been tasked with overseeing an industry that was unregulated and unaccountable for more than 20 years, and says it will robustly defend its reasoning and decisions against legal challenges.

Our earlier report on Democrats’ potential midterm gains in Congress examined how expanded subpoena power and investigative resources could intensify oversight of banks, crypto firms, and the regulators supervising them. It also outlined likely pressure points ranging from financial deregulation and consumer protection rollbacks to scrutiny of executives and agencies through hearings that can bring major legal, compliance, and reputational costs.

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