tech companies

Big online firms face 0.1% supervisory fee under new EU rules

Reuters
Big online firms face 0.1% supervisory fee under new EU rules

EU. European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium May 5, 2021

Yves Herman/Reuters

The annual fee will be used to cover the costs of monitoring compliance with new EU rules requiring tech giants to conduct more stringent policing of content

Major online platforms face a yearly fee up to 0.1% of annual net income to cover the costs of monitoring compliance with new European Union rules requiring them to do more to police their content, an EU document shows.

The Digital Services Act (DSA) rules are likely to be agreed between EU countries and lawmakers later this month. Levying such a fee would be a first for the European Commission, which is the bloc’s executive body.

The move comes as the Commission seeks new sources of revenue to fire up the region’s economic growth in the wake of the pandemic and also foster a greener and more digital economy.

“The overall amount of the annual supervisory fees shall be based on the estimated costs the Commission incurs in relation to its supervisory tasks under this Regulation,” the document, which was seen by Reuters, said.

“The fee shall not exceed 0.1% of the global annual net income of the provider of very large online platforms (or very large search engine) in the preceding financial year.”

The fee should be proportionate to the size of the service as reflected by the number of its recipients in the EU, it added. The Commission defines very large online platforms subject to the DSA as those with 45 million or more monthly active users.

EU antitrust chief Margrethe Vestager told lawmakers and member states last month that the fee could raise between 20 million euros ($22 million) and 30 million euros annually, a person with direct knowledge of the matter told Reuters.

Not-for-profit providers of very large online platforms and very large online search engines will be exempt from the fees, the document said, a move that will benefit companies such as Wikipedia and research bodies.

Vestager’s proposal is likely to get the nod from member states and EU lawmakers, which are scheduled to meet on April 22 for the fourth round of negotiations, in what many hope will lead to a deal.

“We believe it is possible, we see progress,” EU lawmaker Christel Schaldemose, who is steering the DSA in the European Parliament, told Reuters.

The Commission did not respond to a request for comment.

“We want the implementation of the DSA to be a success, and support supervisory fees that are proportionate, backed by a detailed methodology, and commensurate with industry standards,” Alphabet’s Google said. – Rappler.com