By Sam Tobin
LONDON, May 7 (Reuters) – Facebook and Instagram owner Meta is challenging Britain’s media regulator Ofcom over how fees and penalties under the Online Safety Act are calculated, London’s High Court heard on Thursday.
The challenge centres on Ofcom’s use of worldwide, rather than UK, revenue to determine fees and potential fines.
Britain’s 2023 Online Safety Act sets tougher standards for social media platforms such as Facebook, as well as search and pornographic content providers. It allows Ofcom to fine companies up to 10% of qualifying global revenue and to recover the costs of running the regime through fees.
Meta argues Ofcom’s approach is disproportionate and unlawful, and could result in fines larger than any imposed by a UK regulator.
It is also challenging Ofcom’s policy of how it calculates fines where two or more providers owned by the same organisation are found jointly liable for breaches.
Ofcom can then impose a fine based on the qualifying worldwide revenue of the whole organisation, not just the revenue of the individual site or app, regardless of whether that revenue relates to regulated services, Meta says.
CHALLENGE TO BE HEARD IN OCTOBER
“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 in a statement.
“This would still allow Ofcom to impose the largest fines in UK corporate history.”
An Ofcom spokesperson said the regulator had set fees and penalties based on a provider’s qualifying worldwide revenue.
“Disappointingly, Meta are objecting to the payment of fees, and any penalties that could be levied on companies in future, that are calculated on this basis,” Ofcom said.
Meta’s challenge is due to be heard in October and trade body CCIA and “Fortnite” video game maker Epic Games may seek to intervene, Meta’s lawyers said.
Matthew Sinclair, CCIA UK Senior Director, said in a statement: “CCIA supports Meta’s challenge and intends to apply to intervene in order to assist the court in understanding the wider potential impact on the sector.”
Epic did not immediately respond to a request for comment.
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.
(Reporting by Sam Tobin. Editing by Paul Sandle and Mark Potter)
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