Meta, the parent company of Facebook and Instagram, has launched a High Court challenge against UK media regulator Ofcom over charges and possible penalties introduced under the Online Safety Act. The court case centres on how the regulator determines fees for tech firms, which Meta argues are “disproportionate” and unjustly affect a small number of companies. Under regulations that came into force in September, fees are calculated from qualifying worldwide revenue for firms earning more than £250m per year. At a initial hearing in London on Thursday, the High Court heard arguments from Meta’s legal team, who argue that Ofcom’s methodology is unlawful and requires review. A full hearing is scheduled for October.
The disagreement over calculation of fees
Meta’s court action focuses on what the company views as a deeply problematic approach to calculating its monetary liabilities under the Online Safety Act. Monica Carss-Frisk KC, acting for the tech giant, has contended in court documents that Ofcom’s methodology is “troubling” and establishes an unfair system whereby a small number of large companies bear the vast majority of the regulator’s running expenses. The barrister argues that this arrangement contradicts the spirit of the legislation, which was designed to regulate a broad range of internet services across the UK, not place financial burden on a small group of firms.
A central area of dispute is Ofcom’s reliance on qualifying worldwide revenue as the foundation for fee calculation. Meta contends this measure is unrelated to the actual earnings businesses produce from their operations in the UK, rendering the fees disproportionate to the services being regulated in Britain. The company has proposed an alternative approach whereby penalties and fees would be determined exclusively on the basis of revenues generated by regulated services in the countries where they operate. This, Meta argues, would still permit Ofcom to apply suitable financial penalties whilst guaranteeing a fairer distribution of regulatory costs throughout the sector.
- Fees calculated using qualifying worldwide revenue rather than United Kingdom-only income
- Handful of large corporations bearing overwhelming proportion of Ofcom’s operating costs
- Meta suggests fees derived from income from regulated offerings in each country
- Ofcom justifies its methodology as based on plain reading of the statutory framework
Meta’s legal arguments and concerns
Uneven pressure on large platforms
Meta’s High Court legal action questions the validity of the fairness of Ofcom’s fee framework under the Online Safety Act. The company argues that the regulator’s system creates inequitable conditions where a limited group of large digital platforms shoulder the financial burden of applying regulatory requirements designed to cover a much broader spectrum of internet services. According to Meta’s lawyers, this concentration of costs conflicts with the legislative intent, which formally recognised the need to oversee a broad selection of digital services and platforms based in the United Kingdom.
The difference becomes especially pronounced when assessing the size of companies affected. Whilst Ofcom’s regulatory remit extends to numerous internet service providers, search engines, and smaller platforms, the fee structure effectively means that Meta, together with a handful of other major technology companies, pays for the vast bulk of the regulator’s day-to-day expenditure. This setup, Meta argues, is fundamentally unjust and creates perverse incentives that put at a disadvantage incumbent platforms whilst conceivably permitting smaller rivals to operate with negligible financial input to regulatory oversight.
Meta’s legal team has emphasised that this disproportionate allocation of costs creates doubt about the lawfulness of Ofcom’s interpretation of the Online Safety Act. The company maintains that whilst it accepts its obligation to pay to regulatory costs, the current methodology fails to reflect a fair and proportionate approach. Meta’s position is that larger firms ought not face penalties for their market prominence through inflated fee obligations that bear no direct relationship to the real costs needed to oversee their particular offerings within the UK market.
Ofcom’s regulatory approach and reaction
Ofcom has firmly defended its process of establishing fees and prospective fines under the Online Safety Act, maintaining that its approach constitutes a straightforward interpretation of the legislation as Parliament envisaged. The regulator maintains that the fee mechanism, calculated using qualifying global turnover for companies earning more than £250m per year, delivers a balanced and open mechanism for funding its expanded remit in online safety regulation. Ofcom’s position is that this method guarantees adequate resources are in place to protect users from harmful online content whilst maintaining consistency with how compliance expenses are generally allocated across industries. The regulator has stated it will “robustly defend” its position in court, satisfied that its interpretation aligns with the straightforward understanding of the law and furthers the public good.
An Ofcom spokesperson voiced concern at Meta’s legal action, describing the company’s objections as reluctance to pay fees and foreseeable penalties based on the agreed methodology. The regulator underscores that its framework applies consistently to all qualifying companies and reflects the statutory obligations set out in the Online Safety Act. Ofcom’s stance demonstrates its view that major digital platforms, which produce significant income and possess greater ability to cause harm through their services, should contribute proportionally to the costs of their regulation. The regulator is determined to implementing the Online Safety Act rigorously and maintains its charging model is lawful and required to fulfil this legal duty.
| Regulatory aspect | Details |
|---|---|
| Fee calculation basis | Based on qualifying worldwide revenue for companies earning more than £250m annually |
| Maximum penalty for breaches | Up to 10% of qualifying worldwide revenue or £18m, whichever is greater |
| Ofcom’s legal position | Defends methodology as plain reading of the Online Safety Act legislation |
| Scope of regulation | Applies to search engines and platforms where users can share content, including social media |
Extended implications and sector involvement
The High Court challenge has attracted significant attention from other technology companies and industry bodies, signalling that Meta’s legal battle extends far beyond a single corporation’s disagreement with regulators. Epic Games, the developer behind the hugely popular Fortnite, and the Computer and Communications Industry Association have both requested permission to participate in the proceedings, pointing to broad anxiety about how Ofcom’s fee structure might affect the broader tech sector. Their involvement underscores the case’s potential to reshape how online safety regulation is funded across the entire industry, with implications for companies of varying sizes and business models.
Mr Justice Chamberlain recognised the case’s significance by describing it as raising issues “of wide public importance”, a recognition that the outcome could set important benchmarks for funding approaches for regulators in the digital economy. The initial hearing in London established that a complete hearing is arranged for October, providing ample time for the various parties to prepare comprehensive arguments. The schedule suggests the courts will thoroughly assess whether Ofcom’s approach to calculating fees based on global turnover is proportionate and legal, potentially shaping how UK regulators fund their operations in future.
- Epic Games and the Computing and Communications Industry Association seek to intervene in the case
- Justice Chamberlain established the dispute raises issues of significant public concern to the industry
- Full hearing scheduled for October 2025 with preliminary hearing completed in London on Thursday