The European Court of Justice Invalidates Digital Platform Supervisory Fee Decisions: A Legal Analysis of the Meta and TikTok Judgments
On September 10, 2025, the General Court of the European Union rendered two landmark judgments in Cases T-55/24 (Meta Platforms Ireland v. Commission) and T-58/24 (TikTok Technology v. Commission), which fundamentally reshape the implementation framework of the Digital Services Act (DSA). These decisions, which invalidate the European Commission’s supervisory fee determinations, represent the first significant judicial correction of Commission action under the nascent digital governance regime and expose critical procedural deficiencies in the application of European digital law. The rulings transcend mere technical disputes over fee calculations, striking at the heart of democratic lawmaking procedures within the European Union and the proper allocation of competences among different categories of legal instruments. Beyond their immediate impact on Facebook, Instagram, and TikTok, these judgments establish precedential authority that may fundamentally alter the Commission’s approach to digital platform regulation and underscore the judiciary’s commitment to procedural propriety even in rapidly evolving technological contexts.
Legal Framework: The Digital Services Act and the Supervisory Fee Architecture
The Digital Services Act, which entered into force in 2022, established a revolutionary supervisory model for Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs), introducing a comprehensive digital regulation framework at the Union level that departs significantly from traditional regulatory paradigms. The legislation’s most innovative feature arguably lies in its self-financing mechanism, whereby supervised entities bear the direct costs of their own regulation through annual supervisory fees, fundamentally diverging from conventional models of public financing for regulatory oversight. This mechanism reflects the principle that those who benefit fromâand potentially create risks withinâthe digital ecosystem should internalize the costs of maintaining its integrity and safety.
Pursuant to Article 43 of the DSA, these fees must cover the entirety of costs incurred by the Commission in executing its supervisory mandate, encompassing compliance assessments, audit procedures, recommendation formulation, and sanctions enforcement. The fee structure operates on a proportionality principle, with individual assessments calibrated to reflect the average monthly active recipients of each platform, thereby ensuring that the largest platformsâwhich generate the greatest systemic risks and demand the most intensive oversightâbear correspondingly greater financial responsibility. This proportional allocation mechanism was designed to achieve both fiscal sustainability and regulatory fairness, creating a self-sustaining system independent of budgetary fluctuations or shifting political priorities among Member States. The architecture further contemplates dynamic adjustment capabilities to accommodate the rapidly evolving nature of digital markets and technological innovation.
The Dispute’s Genesis: Methodological Divergences in User Calculation
The central controversy arose from the Commission’s decisions of November 27, 2023, establishing supervisory fee assessments for Facebook, Instagram, and TikTok for the 2023 assessment year, which revealed fundamental interpretive disagreements regarding the DSA’s implementation requirements. Rather than relying upon data submissions from the platforms themselves pursuant to Article 24(2) DSA, the Commission elected to deploy a proprietary “common methodology” based upon data procured from independent third-party analytics firmsâspecifically, SensorTower and Similarweb. This methodological choice reflected the Commission’s concerns regarding the consistency and reliability of platform-generated data, given the heterogeneous calculation methodologies employed by different platforms for determining average monthly active recipients, which complicated equitable cost allocation across the regulatory perimeter.
The procedural irregularity that catalyzed the legal challenge centered upon the Commission’s decision to attach this methodology to individual implementing decisions rather than establishing it through appropriate delegated legislation in accordance with the Union’s hierarchical legal framework. Meta and TikTok contended that such methodology, given its fundamental significance for fee calculation and its general applicability across all supervised platforms, required establishment through delegated acts pursuant to Article 43(4) DSA, which mandates detailed specification of fee determination methods and procedures. The platforms further argued that the Commission’s approach produced substantial discrepancies relative to their internally reported user figures, potentially undermining both the DSA’s systemic coherence and the proportionality principle underlying the fee structure. This methodological dispute thus implicated broader questions concerning the proper relationship between implementing and delegated acts within the Union’s legal architecture.
The Court’s Determination: Hierarchical Violations in Legal Instrumentation
The General Court unanimously endorsed the applicants’ contentions, finding fundamental breaches of legal procedure that transcend mere technical non-compliance and implicate core principles of democratic governance within the European legal order. The judgment rested upon comprehensive analysis of the Union’s hierarchical source-of-law framework and the appropriate division of competences between delegated and implementing acts, identifying systemic errors in the Commission’s approach to DSA implementation. The Court emphasized that these violations constituted more than bureaucratic technicalities, instead touching upon foundational rule-of-law principles and democratic control mechanisms that constitute the European Union’s constitutional bedrock. Additionally, the Court observed that by circumventing procedures prescribed for delegated acts, the Commission deprived both the European Parliament and Council of their democratic oversight prerogatives over a critical component of the digital platform regulatory framework.
Methodology as an Essential and Indispensable Element
The Court unequivocally determined that the methodology for calculating average monthly active recipients constitutes an element “inextricably linked to the determination of supervisory fees” and represents an “essential and indispensable component” thereof, thereby rejecting the Commission’s characterization of the attached methodology as mere technical exposition of computational processes. In its reasoning, the Court emphasized that this methodology, by virtue of its content, scope, length, and general applicability across all platform providers, exhibits characteristics of normative documentation that transcends the explanatory function of individual administrative decisions. The Court further noted that absent this methodology, practical application of the mathematical formula specified in Delegated Regulation 2023/1127 would prove impossible, thereby establishing the methodology as a necessary component of the entire fee determination mechanism rather than auxiliary information for decision addressees. The Court additionally emphasized the methodology’s general and abstract character, applied horizontally across all platformsâa distinguishing feature of delegated acts rather than individual implementing decisions.
Violation of Article 43(4) DSA
This provision imposes upon the Commission a clear and absolute obligation to establish “in detail” the methods and procedures for fee determination through delegated acts, representing a crucial element of democratic control over digital regulation lawmaking processes. The Court categorically determined that the Commission, by merely indicating three alternative information sources within Delegated Regulation 2023/1127 (data transmitted by providers, information requested by the Commission, and “any other information in the Commission’s possession”), failed to discharge this fundamental obligation adequately. The Court underscored that Article 43(4) DSA imposes upon the Commission a duty to specify and concretize the DSA through supplementation via delegated acts with detailed elements not specified by the legislator, necessitating presentation of concrete, operational methodology rather than general guidance.
The Court rejected the Commission’s contention that incorporating overly detailed methodology into delegated acts would prove “counterproductive” given the need for regular updates responsive to technological and market changes. The Court noted that such argumentation contradicts Recital 77 DSA, which expressly contemplates delegating to the Commission powers to supplement the regulation’s provisions through delegated acts precisely to accommodate market and technological changes, demonstrating legislative awareness of the need for adaptive mechanisms responsive to evolving market conditions.
Circumvention of Control Procedures
By attaching methodology to implementing acts, the Commission improperly circumvented essential control procedures prescribed for delegated acts, which constitute fundamental elements of democratic lawmaking within the European Union and guarantee appropriate oversight of the Commission’s executive activities. The Court highlighted the particular significance of procedures specified in Article 87(4) DSA, requiring the Commission to conduct consultations with experts designated by each Member State before adopting delegated acts, ensuring incorporation of diverse national perspectives and specialized knowledge in technical rule formulation. Equally significant is the control procedure established in Article 87(6) DSA, granting the European Parliament and Council authority to object to proposed delegated acts before their entry into force, representing a crucial democratic control mechanism over the Commission’s quasi-legislative activities.
The Court observed that circumventing these procedures constituted more than formal non-compliance, depriving democratic institutions and Member States of meaningful influence over one of the most significant elements of the entire digital platform supervision financing system. The Court further indicated that these procedures were included by the legislator for substantive reasonsâto ensure that delegated acts with potentially significant impact upon regulated entities and market functioning undergo appropriate social and political scrutiny before implementation. Avoiding these procedures by transferring essential methodological elements to implementing acts therefore violated not merely the letter of the law but its spirit, undermining fundamental principles of democratic governance in digital regulation.
Implications for the Digital Services Act’s Future
Imperative for Delegated Regulation Revision
The Commission currently confronts an unprecedented challenge in developing new methodology under delegated act procedures, extending far beyond routine technical corrections to require fundamental reconstruction of its approach to digital supervision financing. This process will demand not only profound technical analysis of various available methodologies for calculating average monthly active recipients, but also delicate balancing of diverse stakeholder interests, including Member States with potentially divergent preferences regarding regulatory detail levels, digital platforms that will lobby for solutions minimizing their financial burdens, and civil society organizations that may demand maximum transparency and democratic control. The Commission additionally faces temporal pressure from the Court’s twelve-month limitation, potentially hindering appropriately comprehensive consultations and analyses.
The particular challenge lies in developing methodology that proves simultaneously sufficiently precise to satisfy legal requirements for detailed fee calculation method specification, and sufficiently flexible to accommodate the rapidly evolving digital market character and diverse platform business models. The Commission must also consider whether new methodology should rely upon platform-provided data, external third-party data, or some combination of approaches, while addressing data protection concerns, trade secrets, and implementation costs. Furthermore, the Commission must navigate potential resistance from Member States or Union institutions during the democratic control process, as evidenced by the Court’s emphasis on proper consultation and oversight procedures.
Impact Upon Other Digital Platforms
The Court’s determination may trigger cascading effects, influencing all other supervisory fee decisions issued by the Commission based upon the same defective methodology, potentially leading to comprehensive restructuring of the entire digital supervision financing system within the European Union. Other digital platforms subject to the DSA regime, including Google Search, YouTube, Wikipedia, Booking.com, Amazon Store, and LinkedIn, which received similar decisions based upon identical methodology attached to implementing acts, may now effectively utilize this legal precedent to challenge their supervisory fee assessments through proceedings before national courts or directly before the General Court. This situation creates substantial legal uncertainty for the Commission, which may be compelled to suspend fee collection from remaining platforms pending methodological regularization, potentially seriously threatening the entire digital supervision system’s financing.
Additionally, platforms that have already remitted fees for 2023 based upon defective decisions may demand refunds or at minimum recalculation according to proper procedures, potentially creating significant budgetary burdens for the Union and requiring identification of alternative financing sources for the Commission’s supervisory activities during the transitional period. Risk also exists that certain platforms may attempt to exploit this situation to delay or avoid fulfilling their DSA-derived obligations, arguing absence of stable legal foundation for the entire supervisory system, which could seriously weaken the new digital regulations’ effectiveness.
Preservation of Decision Effects
Despite invalidating the challenged decisions, the Court strategically determined to preserve their effects during a transitional period extending up to twelve months from judgment finality, representing a balanced solution aimed at securing continuity of the digital platform supervision system’s operation during the interim period. This decision reflects the Court’s profound understanding of complete invalidation’s practical consequences for the regulatory system’s financial stability and the necessity of providing the Commission adequate time for implementing necessary procedural corrections. The Court indicated that immediate invalidation of decision effects could jeopardize Article 43 DSA implementation, which provides that supervisory fees must cover costs incurred by the Commission in connection with executing supervisory tasks, while sudden return of already remitted fees would deprive the Commission of financial resources necessary for continuing regulatory activities.
The Court further considered that despite procedural irregularities in methodology establishment, it identified no substantive errors affecting the platforms’ fundamental obligation to remit supervisory fees for 2023, meaning that the essential legal basis for fee collection remains intact. The twelve-month transitional period aims to provide the Commission sufficient time for conducting comprehensive delegated regulation revision processes, encompassing required consultations with Member State experts and control procedures within the European Parliament and Council. Simultaneously, this period should enable platforms to prepare for potential changes in fee calculation methodology and ensure smooth transition to the new system without disrupting the Commission’s supervisory activities.
Broader Significance for European Legal Architecture
Competence Division Principles
These judgments underscore the fundamental importance of proper competence allocation between delegated and implementing acts within the European Union’s legal system, representing one of the pillars of democratic governance and control over the Commission’s quasi-legislative activities. Delegated acts, pursuant to Article 290 TFEU, serve to supplement and specify basic legislative acts by adding elements of general and abstract character that the legislator deliberately left for executive elaboration, but under strict democratic control by Parliament and Council. Conversely, implementing acts, governed by Article 291 TFEU, aim to ensure uniform conditions for implementing legally binding Union acts through adopting concrete determinations in individual cases, without creating new norms of general character.
The Court explicitly indicated that the Commission violated this fundamental distinction by attempting to place normative and general elements (user calculation methodology) within implementing acts of individual character, constituting impermissible circumvention of control mechanisms prescribed by the Treaties. This distinction transcends mere legal formalism, possessing profound democratic significanceâensuring that all generally applicable norms that may affect the rights and obligations of broad categories of subjects undergo appropriate social and political scrutiny before implementation. The Court’s insistence upon procedural propriety therefore reinforces constitutional principles essential to the Union’s democratic legitimacy and legal coherence.
Protection of Democratic Procedures
The judgment constitutes a fundamental defense of control procedures prescribed for delegated acts, which represent essential elements of democratic lawmaking within the EU and provide important counterbalances to the Commission’s expanding quasi-legislative powers in increasingly complex regulatory domains. These mechanisms were established by the Treaty drafters not fortuitously, but as responses to the need for maintaining democratic control over regulatory processes in situations where Parliament and Council cannot effectively regulate all technical details in rapidly evolving economic sectors. Consultative procedures with Member State experts prescribed in Article 87(4) DSA aim to ensure that delegated acts incorporate diverse specialist knowledge and national perspectives, while Parliament and Council objection rights under Article 87(6) DSA constitute ultimate guarantees of democratic control over Commission activities.
The Court emphasized that these procedures constitute more than bureaucratic formalities, instead representing essential guarantees of regulatory quality and democratic legitimacy, particularly in such sensitive areas as digital platform regulation, which may have far-reaching consequences for freedom of expression, market competition, and fundamental rights. Circumventing these procedures by the Commission not only violated legal requirements but also undermined confidence in Union institutions and could establish dangerous precedents for future regulatory activities in other digital economy sectors. The Court’s vigilant protection of these procedural safeguards therefore serves broader constitutional values within the European integration.
Founder and Managing Partner of Skarbiec Law Firm, recognized by Dziennik Gazeta Prawna as one of the best tax advisory firms in Poland (2023, 2024). Legal advisor with 19 years of experience, serving Forbes-listed entrepreneurs and innovative start-ups. One of the most frequently quoted experts on commercial and tax law in the Polish media, regularly publishing in Rzeczpospolita, Gazeta Wyborcza, and Dziennik Gazeta Prawna. Author of the publication âAI Decoding Satoshi Nakamoto. Artificial Intelligence on the Trail of Bitcoin’s Creatorâ and co-author of the award-winning book âBezpieczeĹstwo wspĂłĹczesnej firmyâ (Security of a Modern Company). LinkedIn profile: 18 500 followers, 4 million views per year. Awards: 4-time winner of the European Medal, Golden Statuette of the Polish Business Leader, title of âInternational Tax Planning Law Firm of the Year in Poland.â He specializes in strategic legal consulting, tax planning, and crisis management for business.
