Tensions between European telecommunications firms and U.S. Big Tech companies have crested, as telecom bosses mount pressure on regulators to make digital giants fork up some of the cost of building the backbone of the internet.
European telcos argue that large internet firms, mainly American, have built their businesses on the back of the multi-billion dollar investments that carriers have made in internet infrastructure.
The European Commission, the EU’s executive arm, opened a consultation last month examining how to address the imbalance. Officials are seeking views on whether to require a direct contribution from internet giants to the telco operators.
Big Tech firms say this would amount to an “internet tax” that could undermine net neutrality.
What are telco giants saying?
Top telecom bosses came out swinging at the tech companies during the Mobile World Congress in Barcelona.
They bemoaned spending billions on laying cables and installing antennas to cope with rising internet demand without corresponding investments from Big Tech.
“Without the telcos, without the network, there is no Netflix, there is no Google,” Michael Trabbia, chief technology and innovation officer for France’s Orange, told CNBC. “So we are absolutely vital, we are the entry point to the digital world.”
In a Feb. 27 presentation, the CEO of German telecom group Deutsche Telekom, Tim Hoettges, showed audience members a rectangular illustration, representing the scale of market capitalization among different industry participants. U.S. giants dominated this map.
Tim Hoettges, CEO of Deutsche Telekom, delivers a keynote at Mobile World Congress.
Angel Garcia | Bloomberg | Getty Images
Hoettges asked attendees why these companies couldn’t “at least a little bit, contribute to the efforts and the infrastructure which we are building here in Europe.”
Howard Watson, chief technology officer of BT, said he sees merit in a fee for the large tech players.
“Can we get a two-sided model to work, where the customer pays the operator, but also the content provider pays the operator?” Watson told CNBC last week. “I do think we should be looking at that.”
Watson drew an analogy to Google and Apple’s app stores, which charge developers a cut of in-app sales in return to use their services.
What have U.S. tech firms said?
Efforts to implement network fees have been strongly criticized — not least by tech companies.
Speaking on Feb. 28 at MWC, Netflix co-CEO Greg Peters labeled proposals to make tech firms pay internet service providers for network costs an internet traffic “tax,” which would have an “adverse effect” on consumers.
Greg Peters, Co-CEO of Netflix, speaks at a keynote on the future of entertainment at Mobile World Congress 2023.
Joan Cros | Nurphoto | Getty Images
Requiring the likes of Netflix — which already spends heavily on content delivery — to pay for network upgrades would make it harder to develop popular shows, Peters said.
Tech firms say that carriers already receive money to invest in infrastructure from their customers — who pay them via call, text and data fees — and that, by asking internet companies to pay for carriage, they effectively want to get paid twice.
Consumers may end up absorbing costs asked of digital content platforms, and this could ultimately “have a negative impact on consumers, especially at a time of price increases,” Matt Brittin, Google’s head of EMEA, said in September.
Tech firms also argue that they are already making large investments in European telco infrastructure, including subsea cables and server farms.
Rethinking ‘net neutrality’
The “fair share” debate has sparked some concern that the principles of net neutrality — which say the internet should be free, open, and not give priority to any one service — could be undermined. Telcos insist they’re not trying to erode net neutrality.
Technology firms worry that those who pay more for infrastructure may get better network access.
Google’s Brittin said that fair share payments “could potentially translate into measures that effectively discriminate between different types of traffic and infringe the rights of end users.”
One suggestion is to require individual bargaining deals with the Big Tech firms, similar to Australian licensing models between news publishers and internet platforms.
“This has nothing to do with net neutrality. This has nothing to do with access to the network,” said Sigve Brekke, CEO of Telenor, told CNBC on Feb. 27. “This has to do with the burden of cost.”
Short-term solution?
Carriers gripe that their networks are congested by a huge output from tech giants. One solution is to stagger content delivery at different times to ease the burden on network traffic.
Digital content providers could time a new blockbuster movie or game releases more efficiently, or compress the data delivered to ease the pressure off networks.
“We could just start with having a clear schedule of what’s coming when, and being able to have a dialogue as to whether companies are using the most efficient way of carrying the traffic, and could certain non-time critical content be delivered at different times?” Marc Allera, CEO of BT’s consumer division, told CNBC.
“I think that’s a pretty, relatively easy debate to be had, actually, although a lot of the content is global, and what might be busy in one country and one time may or may not be busy in another. But I think at a local level is certainly a really easy discussion to have.”
He suggested the net neutrality concept needs a bit of a refresh.
Not a ‘binary choice’
The “fair share” debate is as old as time. For over a decade, telecom operators have complained about over-the-top messaging and media services like WhatsApp and Skype “free riding” on their networks.
At this year’s MWC, there was one notable difference — a high-ranking EU official in the room.
Thierry Breton, internal market commissioner for the European Union, delivers a keynote at Mobile World Congress in Barcelona.
Angel Garcia | Bloomberg | Getty Images
Thierry Breton, head of internal markets for the European Commission, said the bloc must “find a financing model for the huge investments needed” in the development of next-generation mobile networks and emerging technologies, like the metaverse.
Breton said it was important not to undermine net neutrality and that the debate should not be characterized as a “binary choice” between internet service providers and Big Tech firms.
Breton’s presence at MWC appeared to reflect the bloc’s sympathies toward Big Telecom, according to Paolo Pescatore, tech, media and telecom analyst at PP Foresight.
“The challenge in Europe is it’s not that clear cut because you have an imbalance,” Pescatore said. “The imbalance is not down to Big Tech, it’s not down to streamers, and it’s not down to telcos. It’s down largely to the old, out-of-date regulatory environment.”
A lack of cross-border consolidation and stagnating revenues in the telecoms sector created a “perfect concoction that’s unfavorable to telcos,” he said.
“A potential landing zone for resolution is a framework for telcos to negotiate individually with the tech firms that generate the heaviest traffic,” Ahmad Latif Ali, European telecommunications insights lead at IDC, told CNBC. “However, this is a highly contested situation.”
Alphabet CEO Sundar Pichai meets with Polish Prime Minister Donald Tusk in Warsaw, Poland, on February 13, 2025.
Klaudia Radecka | Nurphoto | Getty Images
Google has reversed a policy forbidding employees from discussing its antitrust woes following a settlement with workers.
The company sent a notice to U.S. employees last week saying it rescinded “the rule requesting that workers refrain from commenting internally or externally about the on-going antitrust lawsuit filed against Google by the U.S. Department of Justice,” according to correspondence viewed by CNBC.
Google settled with the Alphabet Workers Union, which represents company employees and contractors, according to the U.S. National Labor Relations Board, or NLRB. The settlement and policy reversal mark a major victory for Google staffers, who have seen increased censorship on subjects such as politics, litigation and defense contracts by the search giant since 2019.
The U.S. Department of Justice filed an antitrust lawsuit against Google in 2020, alleging that the company has kept its share of the general search market by creating strong barriers to entry and a feedback loop that sustained its dominance.
Google said it “will not announce or maintain overbroad rules or policies that restrict your right to comment, internally or externally, about whether and/or how the on-going antitrust lawsuit filed against Google by the U.S. Department of Justice may impact your terms and conditions of employment,” according to last week’s notice.
The reversal comes as Google and the DOJ prepare to return to the courtroom for their scheduled remedies trial on April 21. The DOJ has said it is considering structural remedies, including breaking up Google’s Chrome web browser, which it argues gives Google an unfair advantage in the search market.
A U.S. District Court judge ruled in August that Google illegally held a monopoly in the search market. Google said it would appeal the decision. The DOJ doubled down on its calls for a breakup in a March filing.
Following the August ruling, Kent Walker, Google’s president of global affairs, sent a companywide email directing employees to “refrain from commenting on this case, both internally and externally.”
Shortly after, the Alphabet Workers Union filed an unfair labor practice charge against Google with the NLRB. The union alleged that Walker’s message was an “overly broad directive” and said that a breakup could impact workers’ roles. The NLRB in March ruled that Google must allow workers to speak on such topics.
Google’s settlement states that the National Labor Relations Act gives employees the right to form, join or assist a union. It notes that Google is not rescinding its prior clarification that states employees may not speak on behalf of Google on this matter without approval from the company. The settlement also adds that Google will not interfere with, restrain or coerce workers in the exercise of their rights.
Despite the settlement, spokesperson Courtenay Mencini said Google did not agree with the NLRB’s ruling.
“To avoid lengthy litigation, we agreed to remind employees that they have the right to talk about their employment, as they’ve always been free to and regularly do,” Mencini said in a statement to CNBC.
The settlement by Google comes at a “crucial moment” ahead of the remedies trial, the Alphabet Worker’s Union said Monday.
“We think the potential remedies from this trial could have impact on our wages, working conditions and terms of employment,” said Stephen McMurtry, communications chair of the Alphabet Workers Union-CWA, told CNBC.
Apple CEO Tim Cook inspects the new iPhone 16 during an Apple special event at Apple headquarters on September 09, 2024 in Cupertino, California.
Justin Sullivan | Getty Images
Apple shares skyrocketed 15% on Wednesday after President Donald Trump announced a 90-day pause on his administration’s “reciprocal tariffs,” which would have affected the company’s production locations in Vietnam, India, and Thailand.
The rally added over $400 billion to Apple’s market cap, which now stands just under $3 trillion. It was Apple’s best day since January 1998, when late founder Steve Jobs was the interim CEO and three years before the company unveiled the first iPod. At the time, Apple’s market cap was close to $3 billion.
Apple has been the most prominent name to get whacked by Trump’s tariffs. Before Wednesday, it was on its worst four-day trading stretch since 2000. Investors worried about Apple’s outlook because the company still makes the majority of its revenue from selling physical devices, which need to be imported into the U.S.
Most of Apple’s iPhones and other hardware products are still made in China, which was not exempted from tariffs on Wednesday. In fact, Trump increased tariffs on China to 125% on Wednesday, up from 54%.
China issued an 84% tariff on U.S. goods this week, raising the possibility that Apple could get caught up in a trade war and lose ground in China, its third-largest market by sales.
Apple has worked to diversify its supply chain to lessen reliance on China in recent years.
On Wednesday, tariffs on Vietnam were reduced from 46% to 10%, and tariffs on India were cut 26% to 10%, which raises the possibility that Apple will be able to serve a large percentage of its U.S. customers from factories outside of China with lower tariffs.
Stocks skyrocketed across the board on Wednesday after Trump announced the tariff pause. The Nasdaq Composite climbed over 12%, its second-best day ever.
Apple hasn’t commented publicly on Trump’s tariffs, but CEO Tim Cook will likely address the topic on an earnings call on May 1.
The Nasdaq Marketsite is seen during morning trading on April 7, 2025 in New York City.
Michael M. Santiago | Getty Images
Every bear market has days like this.
The Nasdaq soared 12% on Wednesday, the second-best day on record for the tech-heavy index and its sharpest rally since January 2001, which was the middle of the dot-com crash.
During the financial crisis in October 2008, the Nasdaq enjoyed two of its best five days ever. The other two came as the tech bubble was bursting. The index’s sixth-best day since its beginning in 1971 came on March 13, 2020, as the Covid pandemic was hitting the U.S.
Of the 25 best days for the Nasdaq, including Wednesday, 22 took place during the dot-com collapse, the 2008-09 financial crisis or the early days of Covid. One occurred on Oct. 21, 1987, two days after Black Monday. The other was in November 2022.
Call it a dead-cat bounce, a relief rally or short covering. It’s a familiar reaction during the worst of times for Wall Street.
Be prepared for plenty more volatility.
The worst month on record for the Nasdaq was October 1987, when the index plunged 27%. Second to that was a 23% drop in November 2000. In March 2020, the Nasdaq sank 10%. It’s still down 1% this month just after closing out its worst quarter since 2022.
President Donald Trump sparked the Wednesday bounce when he dropped new tariff rates on imports from most U.S. trade partners to 10% for 90 days to allow trade negotiations with those countries. The president’s social media post lifted optimism that levies would be less severe than expected and immediately boosted a market that’s been hammered since Trump rolled out his sweeping tariff plan last week.
Wealthy Trump donors and business leaders, including hedge fund manager Bill Ackman, Home Depot co-founder Ken Langone and billionaire investor Leon Cooperman have weighed in with hefty criticism of Trump’s tariffs. JPMorgan Chase CEO Jamie Dimon said earlier on Wednesday that the tariffs will likely lead to a recession, after BlackRock CEO Larry Fink said Monday at an event in New York that, “Most CEOs I talk to would say we are probably in a recession right now.”
SpaceX CEO Elon Musk attends a cabinet meeting held by U.S. President Donald Trump at the White House on March 24, 2025.
Win McNamee | Getty Images
Tesla CEO Elon Musk, the world’s richest person and one of Trump’s closest confidantes in the White House, spent the early part of this week slamming Peter Navarro, Trump’s top trade advisor, calling him a “moron” and “dumber than a sack of bricks.”
Musk’s electric vehicle company has gotten pummeled of late, tumbling 22% in the four prior trading sessions after suffering its worst quarter since 2022. The stock soared 23% on Wednesday, its second-best day on record.
The big difference between the current market tumult and the downturns in 1987, 2000-2001, 2008 and 2020 is that many investors say this one was easily avoidable and, potentially, can be reversed based on what the president decides to do.
“What Trump unveiled Wednesday is stupid, wrong, arrogantly extreme, ignorant trade-wise and addressing a non-problem with misguided tools,” investor Ken Fisher wrote in a post on X on Monday, referring to last week’s announcement. “Yet, as near as I can tell it will fade and fail and the fear is bigger than the problem, which from here is bullish.”
Trying to predict Trump’s next move is a fool’s errand.
On Sunday evening the president told reporters that he’s not trying to push the market down, “but sometimes you have to take medicine to fix something.” He stressed the importance of fixing the country’s trade deficit with China, and said “unless we solve that problem, I’m not going to make a deal.”
The president is keeping his hard line on China, at least for now. He said on Wednesday that he was raising the tariff on China higher, to 125%. All other countries would go back to the 10% baseline tariff rate as negotiations take place.
Prior to his latest pronouncement, economic fears had spilled into the bond market, raising concerns that higher interest rates would create further problems for consumers at the worst possible time. The 10-year Treasury note yield, which helps decide rates on mortgages, credit card debt and auto loans, spiked overnight to 4.51% after hitting 3.9% last week. It’s currently at 4.38%.
As the tech industry’s megacap companies, which make up an outsized portion of the Nasdaq and the S&P 500, prepare to report quarterly results starting late this month, management teams will be looking for some visibility that can guide forecasts for the rest of the year and into 2026.
In the absence of more clarity, many of their plans will likely be on hold as they figure out how much existing and expected tariffs will raise costs and hurt revenue, and what they need to do to shore up supply chains.
Wednesday provided some relief. Investors like Ackman are celebrating.
“This was brilliantly executed by @realDonaldTrump,” Ackman wrote on X. “Textbook, Art of the Deal.”
In a note, Wedbush analyst Dan Ives called it “the news we and everyone on the Street was waiting for” after the president’s “self-inflicted Armageddon.”
But for companies that are in the crosshairs of Trump’s wavering policy decisions, all the uncertainty remains.