EU fines Meta up to 6% of revenue per platform in DSA probe

The European Commission found Meta violated the Digital Services Act by designing Instagram and Facebook with addictive features, risking fines of up to 6% of global revenue per platform.

The European Commission said Meta Platforms Inc. violated the Digital Services Act by failing to protect users from addictive design on Instagram and Facebook, exposing the company to fines of as much as 6% of global annual revenue per platform.

"Meta did not adequately assess and mitigate the systemic risks stemming from the addictive design of its platforms, as required under the DSA," the European Commission said in its preliminary findings published Friday.

The investigation covers both Instagram and Facebook, meaning Meta could face separate penalties for each service. The DSA requires platforms with more than 45 million monthly active users in the EU to conduct annual risk assessments and deploy mitigation measures against systemic risks including addictive design, disinformation and illegal content. Both Instagram and Facebook exceed that threshold, the commission said.

The escalation marks a significant step in EU digital regulation enforcement, coming just days after the bloc's General Court dismissed Apple Inc.'s challenge to its "gatekeeper" designation under the separate Digital Markets Act. Google also faces binding DMA orders by July 27, according to a recent court ruling that established a sequencing rule for compliance deadlines.

The DSA, which took full effect in February 2024, gives the commission authority to penalize non-compliant platforms with fines reaching 6% of global annual revenue for a first violation. Repeat offenses can rise to 20%. The law also empowers regulators to impose temporary bans on platforms that cause serious harm.

Meta now has the opportunity to respond to the preliminary findings and propose remedial measures before the commission issues a final decision. The company could be ordered to implement specific design changes to reduce addictive features, such as modifying recommendation algorithms or introducing mandatory time limits. Any such changes could affect user engagement and advertising revenue, which together generated the bulk of Meta's income.

The case represents the first major DSA enforcement action targeting addictive design specifically, a focus that EU regulators have signaled since the law's inception. The commission has previously opened investigations into other platforms under the DSA, including TikTok and X, over content moderation and child safety concerns. The Meta probe extends the regulatory frontier to user interface design and algorithmic amplification, areas that have drawn scrutiny from lawmakers in the U.S. and U.K. as well.

Meta shares have faced pressure this year as investors weigh rising regulatory costs across multiple jurisdictions. The company is also contesting EU antitrust findings and navigating data transfer rules between the U.S. and Europe. The DSA fine, if confirmed, would add to Meta's growing regulatory expenses across its global operations.

This article is for informational purposes only and does not constitute investment advice.