Chapter 3|Additional Obligations for Very Large Platforms|📖 14 min read
The Commission shall charge providers of very large online platforms and of very large online search engines an annual supervisory fee upon their designation pursuant to Article 33.
The overall amount of the annual supervisory fees shall cover the estimated costs that the Commission incurs in relation to its supervisory tasks under this Regulation, in particular costs related to the designation pursuant to Article 33, to the set-up, maintenance and operation of the database pursuant to Article 24(5) and to the information sharing system pursuant to Article 85, to referrals pursuant to Article 59, to supporting the Board pursuant to Article 62 and to the supervisory tasks pursuant to Article 56 and Section 4 of Chapter IV.
The supervisory fee shall be calculated for each service individually in proportion to the number of average monthly active recipients of the service in the Union in the preceding financial year.
However, a provider shall not pay in any given year a supervisory fee exceeding 0,05 % of that provider's annual worldwide net income in the preceding financial year.
The Commission shall adopt an implementing act establishing the amount of the supervisory fee to be charged for each service in accordance with paragraphs 2 and 3. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 88.
Understanding This Article
Article 43 establishes supervisory fee system addressing fundamental regulatory resourcing challenge: effective oversight of Very Large Online Platforms and Very Large Online Search Engines requires substantial Commission resources (expert staff, technical infrastructure, legal support, economic analysis, data analysis capabilities, international coordination, enforcement proceedings), but EU budget pressures and competing priorities could leave DSA supervision under-resourced. Article 43 solves this through industry-funded regulatory model where regulated VLOPs/VLOSEs themselves finance their supervision through annual fees, creating sustainable funding stream scaled to supervisory burden without imposing costs on taxpayers or general EU budget. This approach follows precedent in other EU regulatory domains (banking supervision, pharmaceutical regulation, chemicals authorization) where regulated industries fund specialized oversight.
Fee system operates through several key components. First, fee obligation triggers upon VLOP/VLOSE designation under Article 33: when platform exceeds 45 million average monthly active users in EU, Commission designates it as VLOP/VLOSE triggering enhanced obligations including fee payment. Designation itself generates supervisory costs (user data verification, market analysis, legal proceedings if designation disputed) which fees cover. Second, fees are annual recurring obligations, not one-time charges, reflecting ongoing supervisory activities: continuous compliance monitoring, audit oversight, enforcement investigations, data access facilitation, risk assessment review, Board support, crisis response. Third, fees apply per designated service: if provider operates multiple services each designated separately (e.g., Meta's Facebook, Instagram, WhatsApp as separate VLOPs), each pays separate fee reflecting separate supervisory burden, though provider-level cap applies (discussed below).
Covered costs (paragraph 2) include Commission's supervisory activities: (a) Designation pursuant to Article 33: user data verification, market analysis, designation decisions, processing disputes; (b) Database setup, maintenance, operation pursuant to Article 24(5): transparency reporting database where VLOPs submit content moderation data, requiring technical infrastructure, data management, security; (c) Information sharing system pursuant to Article 85: secure platform for competent authorities to share information, coordinate investigations, exchange data; (d) Referrals pursuant to Article 59: processing DSC referrals requesting Commission intervention, investigation, enforcement; (e) Supporting Board pursuant to Article 62: providing secretariat, analytical support, meeting organization, working group facilitation for European Board for Digital Services; (f) Supervisory tasks pursuant to Article 56 and Section 4 of Chapter IV: direct VLOP/VLOSE supervision including compliance monitoring, audit oversight, enforcement investigations, information requests, expert assessments, penalty proceedings. Collectively, these activities require significant Commission resources: DG CONNECT staff dedicated to DSA implementation, specialized technical experts assessing algorithms and risk mitigation, legal staff conducting enforcement proceedings, economic analysts evaluating market impacts, data scientists analyzing platform data, administrative support, external contractors for specialized tasks. Annual costs likely reach tens of millions of euros across all supervisory activities.
Fee calculation (paragraph 3) uses proportionality principle: individual service fees calculated 'in proportion to the number of average monthly active recipients of the service in the Union in the preceding financial year.' Larger platforms with more users face greater supervisory burden (more content to moderate, more potential for systemic risks, more complex risk assessments to review, higher stakes enforcement requiring more resources) and thus should pay higher fees. This creates fairness: smallest designated VLOPs (just over 45 million users) pay modest fees; giants like Facebook (hundreds of millions EU users) pay substantially more. Proportionality also creates appropriate incentives: platforms cannot avoid fees by slight restructuring while still creating similar supervisory burden. Average Monthly Active Recipients (AMAR) serves as fee base metric rather than revenue or profits, because supervisory burden correlates with user base size more than financial performance. Calculation uses 'preceding financial year' creating predictability: platforms know user numbers determining next year's fees, can budget accordingly. However, AMAR calculation methodology has proven contentious (discussed below in legal challenges).
Fee cap (paragraph 4) protects designated platforms from excessive burden particularly those with large user bases but modest revenue: 'a provider shall not pay in any given year a supervisory fee exceeding 0.05% of that provider's annual worldwide net income in the preceding financial year.' Cap applies at provider level across all designated services, preventing excessive aggregate burden when provider operates multiple designated services. Cap uses worldwide net income (roughly equivalent to profit) not revenue, meaning even 0.05% cap represents meaningful but manageable cost for profitable platforms while protecting less profitable platforms. Example: Platform with €10 billion worldwide net income faces maximum €5 million fee (0.05%). Very profitable platforms (Google, Meta) can absorb fees easily; smaller newly-designated platforms with limited profitability pay much less. Cap creates ceiling but not floor: platforms pay lower of (proportionate fee based on users) or (0.05% net income cap), whichever is less.
Implementation (paragraph 5): Commission adopts annual implementing acts establishing specific fee amounts for each designated service. Implementing act specifies: total estimated supervisory costs for coming year, number of designated services and their AMARs, fee calculation formula, individual fee for each service, payment timelines and procedures. Implementing acts undergo examination procedure (Article 88) involving Member State committee review, ensuring Member State input in fee-setting. This creates transparency and legitimacy in fee determinations.
Legal challenges have emerged testing fee system's boundaries. In 2024-2025, Meta (Facebook, Instagram), TikTok, and other platforms challenged Commission implementing decisions setting their specific fees. Challenges raised several issues: (1) AMAR calculation methodology: Platforms argued Commission used incorrect methodology calculating Average Monthly Active Recipients, particularly regarding how to count users accessing services through multiple devices, shared accounts, or different access methods. EU General Court in September 2025 partially upheld challenges, finding Commission exceeded authority by establishing AMAR calculation methodology through implementing decisions rather than delegated regulations as Article 43(4) requires. Court annulled fee decisions directing Commission to adopt proper delegated regulation establishing methodology before setting fees. (2) Cost allocation: Platforms questioned whether some claimed supervisory costs actually related to VLOP/VLOSE oversight or reflected general Commission activities beyond Article 43's scope. (3) Proportionality: Some smaller designated platforms argued fees disproportionate to actual supervisory burden they generate. These challenges temporarily suspended some fee payments pending regulatory process correction, but Commission is developing compliant fee-setting procedures through delegated acts establishing clear methodology.
Fee system reflects DSA's broader regulatory philosophy: graduated, proportionate obligations scaled to platform size and impact. Smallest platforms pay nothing; medium platforms face due diligence obligations but no fees; designated VLOPs/VLOSEs face enhanced obligations plus fees proportionate to their size. This creates fairness and appropriate regulatory burden distribution while ensuring most impactful platforms contributing to regulatory sustainability.
Key Points
Commission charges annual supervisory fees to all designated VLOPs/VLOSEs to fund EU-level supervision activities under the DSA
Fees cover Commission's estimated supervisory costs including designation procedures, database operations, Board support, enforcement activities, and ongoing oversight
Individual fees calculated proportionate to average monthly active recipients in EU ensuring larger platforms pay more reflecting greater supervisory burden
Fee cap at 0.05% of provider's annual worldwide net income protects smaller designated platforms from excessive burden
Commission adopts implementing acts annually establishing specific fee amounts for each designated service
Fees create sustainable, industry-funded regulatory model where regulated entities finance their own oversight
Legal challenges from Meta, TikTok, and others contested fee calculation methodology, with EU General Court finding Commission exceeded authority in methodology decisions
Ongoing refinement of fee calculation procedures through delegated regulations and implementing acts following court guidance
Fees reflect DSA's graduated regulatory approach: smaller platforms under thresholds pay no fees, designated VLOPs/VLOSEs pay proportionate to size and impact
Fee mechanism ensures Commission has adequate resources for VLOP/VLOSE supervision without burdening general EU budget or taxpayers
Practical Application
For Commission (Implementing Fee System and Annual Fee-Setting): Commission implements Article 43 through multi-step annual process. (1) Cost estimation: Early each year, Commission estimates upcoming supervisory costs across all Article 43-covered activities. DG CONNECT compiles: Personnel costs (DSA-dedicated staff salaries, benefits), infrastructure costs (database operation, information sharing systems, data analysis tools, cybersecurity), external contractor costs (technical experts, auditor oversight specialists, legal consultants, economic analysts), Board support costs (secretariat, meetings, working groups, analytical support), enforcement costs (investigation resources, legal proceedings, expert assessments), overhead allocation (facilities, administration). Total might reach €50-100 million annually depending on number of designated services, complexity of supervision, enforcement activity levels. (2) Designated service inventory: Commission identifies all services designated as VLOPs/VLOSEs as of fee calculation date, including recent designations and excluding any de-designated services. As of early 2025, approximately 25 services designated across both categories. (3) AMAR data collection: Commission collects Average Monthly Active Recipients data for preceding financial year from each designated provider, typically through Article 42 data requests, provider self-reporting in designation procedures, or third-party verification. AMAR data must be verified ensuring accuracy (providers may underreport to reduce fees). Following General Court guidance, Commission must first adopt delegated regulation establishing precise AMAR calculation methodology (how to count multi-device users, shared accounts, geographic attribution, active user definition) providing legal certainty. (4) Fee calculation: Using total estimated costs and each service's AMAR proportion, Commission calculates individual fees. Formula: [Service AMAR / Total AMAR of all designated services] × [Total estimated supervisory costs] = Service fee. Then verify provider-level cap: sum all fees for provider's designated services; if total exceeds 0.05% provider's worldwide net income, reduce proportionately to cap. (5) Implementing act adoption: Commission drafts implementing act specifying: total supervisory costs, designation list, AMAR for each service, fee calculation methodology, individual fee amounts, payment procedures and deadlines, invoicing details. Submit to Member States committee (Article 88 examination procedure) for review and opinion. Address Member State concerns, finalize act. Publish in Official Journal. (6) Fee collection: Commission invoices designated providers specifying fee amount, legal basis, payment deadline (typically 30-60 days), payment instructions (EU bank account, currency, reference numbers). Monitor payments, follow up on delays, initiate collection proceedings for non-payment. Fees flow to EU general budget but are earmarked for DSA supervision ensuring resources available for intended purposes. Challenges Commission faces: Accurate cost estimation (avoiding over-charging generating excess funds or under-charging creating resource shortfalls), AMAR verification (ensuring providers report accurately), legal compliance (following General Court guidance on methodology adoption through proper procedures), transparency (publishing clear explanations of fee calculations building trust), fee disputes (managing provider challenges, appeals, litigation). Commission must balance revenue adequacy (securing sufficient resources for effective supervision) with fee reasonableness (avoiding excessive burden on platforms particularly smaller designated services).
For VLOPs/VLOSEs (Fee Payment and Potential Challenges): Designated platforms must budget for, pay, and potentially challenge supervisory fees. (1) Budgeting and financial planning: Upon designation or each year for continuing designations, platforms should budget for supervisory fees. Estimate using: Prior year AMAR, expected total supervisory costs, estimated AMAR for all designated services, preliminary fee calculation, 0.05% net income cap verification. Fees represent relatively modest cost for major platforms (Meta, Google, Amazon pay millions but small fraction of revenue/profits) but can be significant for smaller newly-designated platforms with limited profitability. (2) AMAR reporting: Platforms must accurately report AMAR data when Commission requests for fee calculation. Reporting should: Use Commission-specified methodology (once delegated regulation adopted), document calculation (supporting data, methodology, exclusions), verify accuracy (internal audit, external verification if required), submit timely (within Commission-specified deadlines). Accurate reporting ensures correct fee calculation and avoids disputes. Some platforms may face tension: underreporting reduces fees but risks enforcement if discovered; over-reporting increases fees unnecessarily. Platforms should report accurately following methodology precisely. (3) Fee payment: Upon receiving Commission invoice, platforms should: Verify fee calculation accuracy (check AMAR attribution, verify proportionality calculation, confirm cap application if relevant), process payment through standard accounting procedures, pay within deadline (avoiding late payment interest, penalties, enforcement), retain documentation (invoices, payment confirmations, calculation worksheets). (4) Potential challenges: Platforms may challenge fees if: AMAR calculation methodology appears incorrect or exceeds Commission authority, fee amount seems disproportionate to actual supervisory burden platform generates, alleged supervisory costs appear outside Article 43 scope, procedural errors in implementing act adoption, cap incorrectly applied or calculated. Challenge process: Submit formal objection to Commission requesting fee reconsideration, escalate to EU General Court if Commission rejects objection, request interim measures suspending payment pending litigation if fee creates undue burden. Meta and TikTok's successful 2024-2025 challenges demonstrate that well-founded legal challenges can succeed, particularly on procedural grounds. However, frivolous challenges merely delay payment without ultimately avoiding legitimate fees. Platforms should: Challenge only when genuine legal issues exist, engage constructively with Commission seeking resolution before litigation, pay fees under reserve if required pending dispute resolution, comply with final determinations after appeals exhausted. (5) Fee impact on business operations: For major profitable platforms, fees represent minor cost easily absorbed in operating budgets. For smaller designated platforms near profitability threshold, fees could be meaningful percentage of income requiring budget adjustments. Platforms should: Incorporate fees in annual budgeting, consider fees in investment decisions, evaluate whether restructuring services (potentially de-designation) makes business sense, recognize fees as cost of operating at VLOP/VLOSE scale in EU market. Fees reflect regulatory principle: platforms generating systemic risks through scale should contribute to oversight ensuring those risks are managed.
For Smaller Platforms (Understanding Fee Exemptions and Thresholds): Platforms below VLOP/VLOSE designation thresholds (under 45 million average monthly active EU users) pay no Article 43 supervisory fees, creating significant regulatory cost advantages. (1) Fee exemption as competitive benefit: Smaller platforms (under threshold) avoid fee burden plus reduced compliance obligations (no risk assessments, no independent audits, no researcher data access, simpler transparency requirements), creating lower regulatory cost structure. This can be competitive advantage: smaller platforms can focus resources on product development, user acquisition, feature innovation rather than compliance and fees. (2) Threshold proximity monitoring: Platforms approaching 45 million user threshold should monitor user growth, estimate designation timing, plan for fee obligations. Reaching threshold triggers: VLOP/VLOSE designation, enhanced compliance obligations, annual supervisory fees, audits, risk assessments, data access requirements. Platforms should: Project user growth trajectories, estimate designation timing (typically 4 months after exceeding threshold, then annual reviews), budget for fees and enhanced compliance costs, develop compliance capabilities before designation, consider whether to slow EU growth to avoid threshold (unlikely for most platforms prioritizing growth, but possible business decision). (3) Strategic considerations: Some platforms might theoretically structure services to stay below thresholds (operating multiple smaller services rather than single large service, limiting EU user growth), but business realities usually make this impractical. Most platforms prioritize growth; those reaching VLOP/VLOSE scale accept regulatory obligations as cost of success. (4) Future threshold changes: Commission can adjust 45 million threshold through delegated acts if needed. If threshold lowered, more platforms would face designation and fees. Platforms should monitor regulatory developments, participate in consultations about threshold adjustments, prepare for potential designation even if currently below threshold. Fee exemption for smaller platforms reflects DSA's proportionality principle: regulatory burden and costs scale with platform size and systemic impact, not one-size-fits-all regulation.
For Regulators and Policy Makers (Fee System Design and Sustainability): Article 43's fee system offers lessons for regulatory sustainability and industry-funded oversight models. (1) Sustainable funding: Fees create predictable revenue stream funding Commission supervision without general budget dependency or annual appropriations uncertainty. This ensures resources available for effective oversight regardless of broader EU budgetary pressures. Sustainability advantages: Multi-year planning (Commission can plan staffing, infrastructure investments knowing fee revenue continuing), insulation from budget politics (supervision funding not subject to annual political budget negotiations), resource adequacy (fees scaled to supervisory burden ensuring resources match needs). (2) Proportionality and fairness: Fee calculation proportionate to AMAR ensures larger platforms creating greater supervisory burden pay more, while cap protects platforms with large user bases but limited profitability. This creates fair burden distribution. Policymakers designing similar systems should consider: What metric best reflects regulatory burden (users, revenue, transactions, market share, risk level)? How to protect smaller regulated entities from disproportionate burden? Should fees be flat, tiered, or precisely proportionate? What exemptions or caps are appropriate? (3) Legal architecture: Commission's legal challenges demonstrate importance of proper legal procedures. Delegated regulations (requiring more formal procedures) should establish fundamental methodologies; implementing acts should apply established methodologies to specific annual determinations. This creates legal certainty and reduces successful challenge risk. (4) Transparency and legitimacy: Publishing clear fee calculations, cost justifications, and fee-setting procedures builds stakeholder trust and reduces disputes. Commission should maximize transparency about supervisory costs and fee allocations. (5) International precedents: Article 43 fee model can inform platform regulation globally. Other jurisdictions considering VLOP oversight (UK, Australia, Canada, developing countries) face similar resourcing challenges. Industry-funded models can provide sustainable resources while ensuring regulatory independence (fees are legal obligation, not voluntary contributions giving platforms leverage). However, fee systems must be carefully designed to avoid regulatory capture (regulators becoming dependent on industry fees might soften enforcement) through legal safeguards ensuring regulator independence. Article 43 offers model for sustainable, proportionate, legally sound regulatory financing in digital platform governance.