A Milan prosecutor on Monday said that Meta, the parent company of Facebook and Instagram, owes more than 887 million euros in value added taxes on estimated revenue it generated in Italy between 2015 and 2021.
Signing up for Facebook and Instagram is theoretically free, but users must accept access to their usage data and personal information, which the prosecutor described as a "synallagmatic contract" in which each side has obligations towards the other.
In Meta's case, these transactions have "commercial purposes" that justify taxation, even if no actual money changes hands, Milan prosecutor Marcello Viola said in a statement.
The prosecutor said that he suspected the "legal representatives" of Meta's Ireland-based platform of failing to declare a total of four billion euros ($4.23bn) in income over the period to evade VAT.
It estimated the VAT due at 887.6 million euros. A judge now must decide whether to pursue the case.
Meta told AFP that "we strongly disagree with the idea that providing access to online platforms to users should be charged with VAT."
It said that the company has "cooperated fully with the authorities on our obligations under EU and local law and we will continue to do so. We take our tax obligations seriously and pay all tax required in each of the countries where we operate."
The prosecution noted that other Italian public authorities had also come to the conclusion that Meta's services were not free, including the competition watchdog in 2018, the administrative court of Lazio in 2020 and the Council of State in 2021.
