Tech Giants Poised to Dodge Billions in EU Network Fees Under New Act
Draft of the EU's Digital Networks Act reportedly scraps mandatory 'fair share' payments in a major win for Google, Meta, and others, opting for a voluntary framework.
Major technology companies including Google, Meta, Amazon, Microsoft, and Netflix are set to avoid billions of dollars in potential fees in Europe, as the EU backs away from forcing them to fund the bloc's telecom infrastructure upgrades.
According to reports on a draft of the upcoming Digital Networks Act (DNA), the European Commission has scrapped plans for a mandatory levy on large tech firms. Instead, the act proposes a voluntary framework to handle disputes and foster cooperation between the technology sector and telecommunication operators. This development marks a significant victory for Big Tech in the long-running “fair share” debate that has pitted the two industries against each other.
The policy reversal defuses one of the most significant regulatory threats faced by the tech industry in Europe. Telecom incumbents like Orange, Deutsche Telekom, and Telefonica have lobbied Brussels for years, arguing that tech companies, whose streaming, cloud, and social media services generate the vast majority of internet traffic, should contribute directly to the cost of upgrading the 5G and fiber optic networks they rely on. The investment required for this infrastructure overhaul is estimated to be in the hundreds of billions of euros.
However, a mandatory levy was fiercely opposed by the tech giants. They argued that they already invest billions annually in their own infrastructure, including massive data centers and global content delivery networks (CDNs), which localize traffic and reduce the burden on telecom networks. For companies with colossal valuations, such as Alphabet's approximate $3.9 trillion and Meta's $1.66 trillion market capitalization, the removal of this potential multi-billion dollar annual cost is a significant positive development for future profitability in the region.
Under the proposed draft, the Body of European Regulators for Electronic Communications (BEREC) is expected to act as a mediator, encouraging dialogue and establishing best practices rather than imposing new legal and financial obligations on the tech sector, according to reporting by the Malay Mail. This approach stands in stark contrast to the binding rules that will apply to traditional telecom companies under the new act.
The Digital Networks Act is a broad overhaul of the EU's telecommunications regulations, intended to streamline rules across the 27-nation bloc and accelerate investment in critical digital infrastructure. The legislation aims to harmonise processes for spectrum licensing and guide the rollout of fiber networks, replacing the existing European Electronic Communications Code.
While the draft represents a decisive win for large US tech companies, the legislative process is not yet complete. The Digital Networks Act must still be formally presented and navigate the EU's complex procedural path, during which further amendments are possible. Lobbying from the telecom sector is expected to remain intense. However, this initial draft signals a major shift in Brussels' thinking, providing significant relief for tech investors who had been pricing in the risk of a costly new European levy.