London – Meta, the parent company of Facebook and Instagram, filed a High Court challenge on Tuesday against Ofcom, Britain’s media regulator, over the way the regulator determines fees and potential fines under the Online Safety Act. Meta contends that Ofcom’s reliance on the company’s worldwide revenue – rather than revenue earned in the United Kingdom – inflates the financial penalties it could face.
Legal arguments and regulatory context
The Online Safety Act, enacted in 2023, empowers Ofcom to levy fines of up to 10% of a company’s qualifying worldwide revenue, or £18 million (about $23.9 million), whichever is greater. In addition, the regulator may recover the costs of running its enforcement regime through fees that are also tied to revenue.
Meta’s legal submission asserts that Ofcom has exceeded its statutory powers by defining “qualifying worldwide revenue” as broadly as possible, with the apparent objective of imposing the highest possible penalties. The company also disputes Ofcom’s method for calculating fines when multiple services owned by the same organization are found jointly liable for breaches.
Ofcom’s response
Ofcom maintains that its approach is proportionate and reflects a “careful balance” in defining qualifying revenue. In its court filing, the regulator clarified that worldwide revenue is used solely to calculate the maximum potential penalty, and that any actual fine must be proportionate to the specific failure.
“On all these fronts, we will robustly defend our reasoning and decisions,” an Ofcom spokesperson said, emphasizing the regulator’s duty to oversee an industry that has been largely unregulated for more than two decades.
Broader regulatory scrutiny
The Meta case follows an Ofcom investigation opened last week into whether the company properly assessed the risks associated with its Instagram Instants feature before its May launch. Meta is also involved in separate legal proceedings with Ofcom alongside TikTok and X, challenging the amount of information the regulator is demanding from tech platforms.
Despite the disputes, Meta’s spokesperson reiterated the company’s willingness to cooperate constructively with Ofcom. “We believe fees and penalties should be based on the services being regulated in the countries they’re being regulated in,” the spokesperson said. “This would still allow Ofcom to impose the largest fines in UK corporate history.”
Implications for the tech industry
The outcome of this case could set a precedent for how UK regulators assess the financial capacity of multinational tech firms. If the court sides with Meta, Ofcom may need to revise its fee‑calculation methodology to focus on UK‑derived revenue, potentially reducing the financial exposure of large platforms.
Conversely, a ruling in Ofcom’s favor would reinforce the regulator’s authority to use worldwide revenue as a benchmark, signaling a tougher stance on compliance with the Online Safety Act.
What’s next?
The High Court hearing is ongoing, and both parties have indicated they will continue to present detailed arguments. Stakeholders across the tech sector, consumer‑rights groups, and policymakers will be watching closely, as the decision could influence future regulatory frameworks not only in the United Kingdom but also in other jurisdictions considering similar online‑safety legislation.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
