Monopolies Commission and Consumer Advocates Warn of Network Levy Implications on Data Tolls

Network levy: Monopolies Commission and consumer advocates warn of data tolls

The EU Commission’s infrastructure tax proposal for large platform operators is facing opposition from the Monopolies Commission and a coalition of around 50 civil society organizations and internet companies. The Monopolies Commission argues that the proposed fee could hinder competition in different markets and that there is no evidence that a redistribution mechanism between data traffic-intensive over-the-top (OTT) providers and network operators could improve the market situation. Moreover, the Monopolies Commission warns that the bargaining power has shifted from network operators to big tech companies.

However, the industry experts also note that disputes over interconnection agreements are not increasing noticeably, and there are no signs that the OTT providers are free-riding on the infrastructure of the network operators. Further, the experts warn that introducing individual payment agreements would distort competition, and powerful platform operators might pass on the increased costs to end customers, thus contradicting the EU regulation on net neutrality.

The coalition of concerned stakeholders, including the Federal Association of Consumer Organizations, Access Now, the Electronic Frontier Foundation, and the European VOD Coalition, argues that a mechanism of direct payments to the established telecommunications companies would have immediate and far-reaching negative consequences for European companies and consumers. The coalition also warns that a new fee would have a direct impact on costs and consumer choice, and the variety and quality of products and services are likely to suffer as a result.

Overall, the opposition argues that there is no evidence of a real problem or market failure in the telecommunications sector, and a traffic-based data toll also raises serious competition concerns. Moreover, with the EU Commission’s plan for light regulation in the fiber optic sector, there is a growing risk that the power of the established telecommunications companies will be disproportionately strengthened.

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