The European Union Is Split on Taxing Tech Companies

Currently, the majority of European Union members reject the proposal by large European telecommunications companies to impose a special tax on technological giants like Google, Facebook, and Netflix. This tax would fund infrastructure investments, particularly in the 5G network.

During a meeting with Internal Market Commissioner Thierry Breton, telecommunications ministers from 18 countries either rejected the proposal or called for studies to assess the necessity and potential effects of the tax.

For some time now, major European companies such as Deutsche Telekom, Orange, Telefonica, and Telecom Italia have been pushing for technology companies, primarily from the US (Alphabet, Meta, Amazon, Netflix), and others to share the costs of building telecommunications infrastructure, arguing that data flow towards them accounts for a significant portion of internet traffic.

However, tech companies argue that they are already investing in the digital ecosystem and reject the idea of a levy.

In addition to the demand for a study on the tax’s impact, European telecommunication ministers are concerned about a potential decrease in technology company investments and the possibility of passing the levy on to consumers. They also warn of a potential violation of the principle of “Internet neutrality,” which requires equal treatment for all Internet users.

Opposition to the tax comes from representatives of Austria, Belgium, the Czech Republic, Denmark, Finland, Germany, Ireland, Lithuania, Malta, and the European Union members Netherlands. Countries supporting the idea include France, Greece, Hungary, Italy, Spain, and Cyprus. Poland, Romania, and Portugal remain neutral.

By the end of June, Breton is expected to prepare a report containing the perspectives of telecoms, major technology companies, and others, which will assist in making a decision.