Majority of EU countries against network fee levy on Big Tech, sources say

© Reuters. FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, March 1, 2023.REUTERS/Johanna Geron

By Foo Yun Chee

BRUSSELS (Reuters) -A majority of EU countries have rejected a push by Europe's big telecoms operators to force major tech companies such as Google to help fund the rollout of 5G and broadband in the region, people familiar with the matter said.

At a meeting with EU industry chief Thierry Breton in Luxembourg on Thursday, telecoms ministers from 18 countries either rejected the proposed network fee levy on tech firms, or demanded a study into the need and impact of such a measure, the sources said.

That echoed comments made last month by EU telecoms regulators' group BEREC.

Deutsche Telekom (ETR:DTEGn), Orange, Telefonica (BME:TEF) and Telecom Italia (BIT:TLIT) want Big Tech to shoulder part of the network costs on the grounds that their data and content makes up a large part of network traffic.

They have found a receptive ear in the European Commission's industry chief Breton, a former chief executive of France Telecom and French IT consulting firm Atos.

Yet Alphabet (NASDAQ:GOOGL) Inc's Google, Apple Inc (NASDAQ:AAPL), Facebook (NASDAQ:META) parent Meta Platforms Inc, Netflix Inc (NASDAQ:NFLX), Amazon.com Inc (NASDAQ:AMZN) and Microsoft Corp (NASDAQ:MSFT) have rejected the idea of a levy, saying they already invest in the digital ecosystem.

The European telecom ministers cited the lack of an analysis on the effects of a network levy, the absence of an investment shortfall, and the risk of Big Tech passing on the extra cost to consumers, the people said.

They also warned about the potential violation of EU "net neutrality" rules, which require all users to be treated equally, as well as possible barriers to innovation, and a lower quality of products.

Critics of a network levy included Austria, Belgium, Czech Republic, Denmark, Finland, Germany, Ireland, Lithuania, Malta and the Netherlands, the people said.

But France, Greece, Hungary, Italy, Spain and Cyprus were among 10 countries which backed the idea, one of the people said.

Poland, Portugal and Romania either took a neutral stance or had not adopted a position, the people said, but another person said they favoured a network fee.

Breton is expected to issue a report by the end of June with a summary of feedback provided by Big Tech, telecoms providers and others, which will help decide his next steps.

Any legislative proposal needs to be negotiated with EU countries and EU lawmakers before it can become law.