Social media giants Meta Platforms (META) and TikTok are challenging a fine from European Union regulators in the bloc’s second-highest court that they believe is unfair and disproportionate, according to a Reuters report. The fines, which were imposed under the 2022 Digital Services Act and amount to 0.05% of the companies’ annual global net income, were allegedly based on flawed calculations. Indeed, Meta argued that the European Commission (EC) improperly used the revenue of the entire group, not just its subsidiary, in order to set the fine.
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In addition, Meta’s lawyer, Assimakis Komninos, told the court that the company still does not understand how the fine was calculated. Separately, TikTok’s lawyer, Bill Batchelor, added that the fee was neither fair nor accurate and claimed that the EC double-counted users by counting those who switch between devices as separate users. As a result, both companies argued that these errors led to inflated penalties.
In response, EC lawyer Lorna Armati defended the fines by saying that the group’s consolidated accounts were appropriately used to assess financial resources and that the companies had enough information to understand the calculation. Nevertheless, the court’s ruling on the two cases — T-55/24 Meta Platforms Ireland v. Commission and T-58/24 TikTok Technology v. Commission — is expected next year.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 42 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $698.07 per share implies that shares are fairly valued.
