EU's Vestager goes Big Tech bashing (again)

Europe's digital chief mulls handing part of network investment bill to US tech giants.

Ken Wieland, contributing editor

May 4, 2022

3 Min Read
EU's Vestager goes Big Tech bashing (again)

US Big Tech is once more under the European cosh.

Only days after member states of the European Union signed off on the Digital Services Act – which will whack large social media platforms with hefty fines if they don't try hard enough to tackle "illegal content" – Margrethe Vestager, Europe's digital chief, opined that it might be a good idea if the likes of Meta, Alphabet, Apple, Twitter, Netflix and Amazon foot some of the region's network investment bill.

Speaking at a news conference, as reported by Reuters, Vestager said that the issue of "fair contribution to telecommunication networks" demanded more attention.

Figure 1: Margrethe Vestager seems focused on resolving logistical and regulatory hurdles to make US big tech cough up for network investment. (Source: European Parliament on Flickr, CC2.0) Margrethe Vestager seems focused on resolving logistical and regulatory hurdles to make US big tech cough up for network investment.
(Source: European Parliament on Flickr, CC2.0)

"We see that there are players who generate a lot of traffic that then enables their business but who have not been contributing actually to enable that traffic," she said.

"They have not been contributing to enabling the investments in the rollout of connectivity."

Vestager did not appear to mention the plus side of Big Tech – giving consumers incentives to upgrade their broadband connections to enjoy its services better – or acknowledge network investments already made by video streaming providers.

Instead, no doubt to the approval of Europe's network operators, Vestager seemed firmly focused on resolving logistical and regulatory hurdles to make US Big Tech cough up for at least some of the network investment bill.

"We are in the process of getting a thorough understanding of how [payment] could be enabled," she said.

ETNO complaints

Vestager's comments were in fact a response to a new study published by the European Telecommunications Network Operators' Association (ETNO), a telecoms lobby group.

Prepared by the international consulting firm Axon Partners Group Consulting for ETNO, the report – entitled "Europe's internet ecosystem: socio-economic benefits of a fairer balance between tech giants and telecom operators – concludes that Big Tech isn't paying its way in Europe "while generating network-related costs of tens of billion euros."

The upshot, finds Axon Partners Group, is that this state of affairs weakens Europe's capacity to swiftly achieve connectivity targets.

"Addressing this through policy action could unlock socio-economic benefits for Europe, including €72 billion (US$75.7 billion) GDP growth, an additional 840k jobs in 2025 and cuts to CO2 emissions," asserts the study.

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The report also refers to newly unveiled data by consulting firm Frontier Economics, which estimates that traffic driven by tech giants alone could generate network costs of at least €15 billion ($15.7 billion), if considering incremental costs, or of at least €36 billion ($37.8 billion) if considering total costs.

"The EU has been determined in tackling power imbalances in the online and tech space," remarked Lise Fuhr, ETNO's director general.

"With today's report, we want to launch an open dialogue with policymakers, consumers and tech companies on how to address the specific imbalances in internet traffic markets. This is not a technical issue: it is about our ability to put Europe at the forefront of the global 5G and FTTH race."

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— Ken Wieland, contributing editor, special to Light Reading

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About the Author(s)

Ken Wieland

contributing editor

Ken Wieland has been a telecoms journalist and editor for more than 15 years. That includes an eight-year stint as editor of Telecommunications magazine (international edition), three years as editor of Asian Communications, and nearly two years at Informa Telecoms & Media, specialising in mobile broadband. As a freelance telecoms writer Ken has written various industry reports for The Economist Group.

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