Meta Platforms (META): EU Telecoms Should Explore Options Beyond Big Tech Subsidies for Network Expenses

Today, Meta Platforms, Inc. (NASDAQ: META), formerly known as Facebook, issued a statement emphasizing that subsidies from Big Tech should be considered the last resort for European Union (EU) telecoms operators in their efforts to secure financial support for their network costs.

For over two decades, telecom operators such as Deutsche Telekom, Orange, and Telefonica have been advocating for major U.S. tech giants to contribute to the development of 5G networks and broadband infrastructure in Europe. They argue that these tech companies generate a significant portion of the region’s internet traffic.

Earlier this year, the European Commission initiated a consultation to explore the possibility of imposing a financial burden on tech giants to support Europe’s telecoms network.

In response, Meta and other companies have argued that such an approach would not effectively address the financial challenges faced by telecom operators. They point out that tech companies have already made substantial investments in the sector, which should not be overlooked.

Furthermore, Meta highlighted the importance of strong regulatory oversight for telecom companies that receive subsidies. Meta suggested implementing a thorough process to ensure that the funds are solely used for network investments, preventing any misuse.

It has been reported that the majority of EU countries have rejected the proposal to impose a network fee on Big Tech, according to sources who spoke to Reuters earlier this month.

Meta said, “The Commission should first require a demonstration by any telco seeking subsidies that it has first engaged with CAPs (content application providers) in good faith to reach technical, non-subsidy solutions”.

In addition, Meta recommended that any subsidies should be awarded through a transparent tender process, ensuring fair access to all network operators, not just the larger ones.

“Incumbent operators receiving the functional equivalent of government bailouts should have additional restrictions imposed on them such as elimination of executive bonuses, caps on compensation, freezes on dividends,” it said.