Dutch warn against internet tax as EU looks to Big Tech to fund networks

The comments by Dutch economic affairs minister Micky Adriaansens marked the first by an EU country after EU industry chief Thierry Breton kicked off a consultation last Thursday on who should foot the bill to roll out costly 5G and broadband.

Deutsche Telekom, Orange, Telefonica, Telecom Italia and other operators have long lobbied for a Big Tech contribution and have found an ally in Breton, a former chief executive at Orange.

Among the companies that said an internet tax would undermine EU rules to treat all users equally are Alphabet Inc’s Google, Apple Inc, Meta Platforms Inc, Netflix Inc, Amazon.com Inc and Microsoft Corp. These companies account for more than half of data internet traffic, according to telecom operators.

Adriaansens said the Dutch government had commissioned a study by economic consultancy Oxera which showed the drawbacks of such a tax.

“It will penalise the consumers,” she told Reuters in an interview, saying that consumers who pay subscription fees to telecoms providers and also subscribe to streaming and video services may see the latter fees go up with Big Tech likely to pass on the internet tax.

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“We should analyse the problem first and what the normal market reaction is to these challenges. The first one is the government in place to facilitate or are there other funds available or is it just the markets’ responsibility to take care of this infrastructure?” Adriaansens said. “I think that there is this concern that our infrastructure is not able to meet our expectations and our ambitions. So, I understand that concern but I don’t think this is the way to go then, so fast.” According to Oxera’s study, Europe’s telecoms providers have not been burdened with higher network costs despite the strong growth in internet data traffic. It also found these companies’ operating profits have been boosted by network modernisation which has led to fewer employees and lower capital costs.

“Our analysis of the proposals for a levy shows that such a policy cannot robustly be shown to increase economic efficiency, and would potentially bring substantial transaction and set-up costs,” the report said.