Digital giants face EU networks scrutiny

European Commission (EC) EVP Margrethe Vestager (pictured) confirmed work is underway to assess whether and how tech giants responsible for generating huge amounts of data traffic should make a fair contribution to telecoms networks.

In a Q&A session during a press conference covering potential EC action against Apple, Vestager explained she believed the body should focus heavily on the contribution companies make to networks.

Although she did not name any companies, Vestager observed “we see that there are players who generate a lot of traffic that then enable their business, but they have not been contributing… to enable the investments in the rollout of connectivity”.

She noted the EC is “in the process of getting a thorough understanding of how that could be enabled”, and to see if there are asymmetries here in the markets that would make it a fair thing to ask for a contribution to the investment in the networks ”.

Vestager was speaking on the same day telecoms industry group ETNO published a report prepared by Axon Partners Group Consulting noting Meta Platforms, Alphabet, Apple, Amazon, Microsoft and Netflix now account for 56 percent of traffic on fixed and mobile networks, but have made “Little or no contribution” to development costs.

ETNO asserted internet traffic markets are essentially unbalanced, in turn contributing to making European operators financially weaker and impairing their ability to invest in 5G and fiber networks.

The EC is already introducing the Digital Services Act (DSA) and Digital Markets Act (DMA) as part of efforts to rein in US tech giants.

No magic number
Vestager also gave short shrift to telecoms industry calls to loosen European Union merger rules to allow more consolidation.

“The problem is that the arguments that we hear, like the need for scale in order to invest, they are not new.”

Vestager insisted the EC assesses mergers on a case-by-case basis and did not have a “magic number” when it came to how many operators there should be in a particular market.

As prices go up and inflation rises, “it is important there is access to affordable telecoms services,” Vestager said.

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