Meta Challenges UK Regulator Ofcom in Court Over Global Revenue Fine Calculations

Meta has asked the High Court in London to restrict how UK communications regulator Ofcom calculates regulatory oversight fees and statutory maximum fines, according to a report from The Next Web (https://thenextweb.com/news/meta-ofcom-online-safety-fines-high-court-hearing) citing Courthouse News.

The hearing concluded on Wednesday following a day and a half of legal arguments. The case focuses on statutory interpretation rather than an individual enforcement penalty, specifically challenging Ofcom's reliance on global turnover rather than UK-specific revenue.

Under the Online Safety Act, Ofcom is empowered to impose fines reaching up to £18 million or 10% of a company's qualifying worldwide revenue, whichever amount is greater. The regulator also funds the administration of the online safety regime by charging fees linked to company turnover. Meta launched its legal challenge over the calculation methodology earlier this year.

Meta contends that Ofcom interpreted its statutory mandate too broadly when defining qualifying worldwide revenue. The company also challenged the regulator's approach to calculating penalties when multiple services owned by a single corporate parent are held jointly liable. In court documents, Meta legal counsel Monica Carss-Frisk labeled Ofcom's approach 'troubling,' arguing it could result in companies like Meta bearing the vast majority of the regulator's running costs despite the framework covering many internet services.

Meta argued that fees and financial penalties should instead reflect regulated services in the jurisdictions where they operate, noting that a UK-specific formula would still permit Ofcom to levy substantial fines while maintaining regulatory cooperation.

Ofcom rejected Meta's arguments in court filings, stating that it 'struck a careful balance' and emphasizing that the revenue rules establish a maximum possible ceiling rather than a mandatory penalty. Counsel for the regulator described Meta's challenge to Ofcom's expertise as 'outlandish,' while an Ofcom spokesperson affirmed outside court that the regulator would defend its decisions.

Children's rights group 5Rights Foundation was granted permission to intervene on Ofcom's side. Executive director Leanda Barrington-Leach stated that Parliament intended the legislation to provide a strong deterrent rather than act as a 'paper tiger.'

Alexandros Antoniou, a senior lecturer in media law at the University of Essex, told Courthouse News that while Meta's broadest challenge against Ofcom's statutory discretion would be difficult to sustain because Parliament gave the regulator wide latitude, the company has a valid case regarding how countable revenue is defined.

The hearing follows separate regulatory friction between platforms and Ofcom. Meta recently joined X and TikTok in challenging the scope of information Ofcom can compel companies to provide, while the regulator also conducts an investigation into Instagram Instants. A judgment on the fees and fines calculation case is expected at a later date.