Here’s Why Google, Apple, Meta May Have to Pay Network Costs in EU

The European Commission on Thursday launched a consultation on the future of Europe’s telecoms sector, starting a process that could lead to requiring Alphabet’s Google, Apple, Meta Platform and Netflix to pay some network costs.

For more than two decades Deutsche Telekom, Orange, Telefonica, Telecom Italia and other operators have lobbied for leading technology companies to contribute to 5G and broadband roll-out.

They argue companies including Amazon and Microsoft account for more than half of data internet traffic.

The tech firms in response call it an internet tax that will undermine EU network neutrality rules to treat all users equally. The 12-week consultation will end on May 19.

EU industry chief Thierry Breton cited the heavy investments required to roll out 5G and broadband, saying he was not targeting any company.

“The burden of these investments is heavier and heavier. And that is in part because of a low return on investment in the telecoms sector, the increase of the cost of raw materials, and the world geopolitical context, the cost of energy, of course, because that has a big role to play,” he told a news conference.

“I want to say right away, that all of this reflection isn’t aimed against anyone at all, rather it’s for our fellow citizens,” Breton said.

He said a contributions mechanism could be one of the solutions.

According to a document seen by Reuters last month, respondents will be asked whether large traffic generators should be subject to a mandatory mechanism of direct payments to finance network deployment and also whether the EU should create a continental or digital levy or fund.

“We hope to move very quickly so that in the summer we will be able to come back with conclusions and then we will see what we do to continue to make progress,” Breton said.

Any legislative proposal will need to be agreed with EU countries and EU lawmakers before it can become law.

“This consultation is a positive and urgent step towards addressing major imbalances in the internet ecosystem to the benefit of European end-users,” telecoms lobbying group ETNO said in a statement.

Tech group Computer & Communications Industry Association (CCIA) criticised the proposal.

“Europeans already pay telecom operators for internet access, they should not have to pay telcos a second time through pricier streaming and cloud services,” Christian Borggreen, CCIA Europe’s senior vice president, said in a statement.

© Thomson Reuters 2023