The owner of Facebook and Instagram has taken the UK’s media regulator to the high court, opening a fresh front in the increasingly fractious relationship between Silicon Valley and Britain’s online safety regime.
Meta has filed for a judicial review of Ofcom’s methodology for setting fees and penalties under the Online Safety Act, arguing that pegging charges to a company’s qualifying worldwide revenue (QWR) is disproportionate and out of step with the geographic scope of the regulator’s remit. A hearing has been scheduled for 13 and 14 October.
The stakes are considerable. Under the Act, Ofcom can levy fines of up to 10 per cent of QWR or £18m, whichever is higher. Given that Meta reported global revenues of roughly $201bn last year, the regulator could in theory issue a penalty of around $20bn, a sum that would dwarf the largest fines in UK corporate history. The fee regime introduced last September applies the same QWR principle to annual tariffs, capturing companies whose user-generated content, search or adult-content services in the UK generate more than £250m a year.
Meta contends that liability should be determined by activity within the jurisdiction doing the regulating. “We and others in the tech industry believe its decisions on the methodology to calculate fees and potential fines are disproportionate,” a company spokesperson said. “We believe fees and penalties should be based on the services being regulated in the countries they’re being regulated in. This would still allow Ofcom to impose the largest fines in UK corporate history.”
Court documents filed on Meta’s behalf by Monica Carss-Frisk KC describe Ofcom’s approach as “troubling”, warning that it would result in a handful of large platforms shouldering the bulk of the regulator’s costs even though the Act covers a much broader sweep of internet services. The barrister noted that QWR is not pegged to revenue generated by any particular service in the UK; rather, once a service is offered to British users, the entirety of its global turnover is counted.
Ofcom, for its part, is preparing to dig in. The regulator said its fees and fines framework reflected “a plain reading of the law” and pledged to “robustly defend our reasoning and decisions”.
Meta is not alone in pushing back. The US online forum 4chan has refused to pay penalties imposed under the Act, and Ofcom is facing separate litigation from the operators of both 4chan and Kiwi Farms. The regime has also drawn criticism from Donald Trump’s White House, which has signalled growing impatience with European digital rules that it sees as targeting American firms.
The financial significance of the new system for Ofcom itself is hard to overstate. Once the preserve of broadcasters and telecoms operators paying for spectrum and licence fees, the regulator now expects the bulk of its £233m budget for the year to come from online safety tariffs, which are forecast to bring in £164m. That marks one of the most substantial shifts in Ofcom’s funding base in its two-decade history.
For SME founders watching from the sidelines, the case is more than a transatlantic skirmish between Big Tech and a British quango. The threshold of £250m in qualifying turnover means most smaller platforms sit outside the fee net, but the principles being tested in October, how revenue is attributed across borders, and how proportionality is measured for global digital businesses, will shape the regulatory environment for any UK-based scale-up that one day finds itself trading internationally on the back of user-generated content. The judgment, when it comes, will be read closely well beyond Menlo Park.
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Meta launches high court challenge against Ofcom over online safety act fines