Big tech companies in Poland and Europe are not subject to the same restrictive regulations as telecommunications operators. At the same time, some of the services they offer are similar to or directly substitute traditional telecom services, increasing competitive pressure in the digital market. According to experts, there is a need to align and harmonise the legal framework for certain services.
“Big tech companies are an indispensable part of our economy and the digital world. They have also contributed enormously to the development of this sector. In many areas, they are direct competitors of telecommunications operators. In our view, they are also clearly partners to a large extent, benefiting from the telecommunications infrastructure built by digital operators,” Mateusz Kowalczyk, Director of Strategic Consulting at Arthur D. Little, told Newseria.
According to the report The Telecommunications Market in Poland: Between Regulation, Global Competition and Security Challenges, prepared by Arthur D. Little for the Confederation Lewiatan’s Telecommunications and Digitalisation Council, companies such as Google, Meta, Apple, Amazon and Microsoft have not only come to dominate their core business segments, but have also steadily moved into areas traditionally served by telecom operators. Internet messengers such as WhatsApp and Messenger have replaced SMS, VoIP applications such as Skype and Zoom have reduced the role of voice calls, while video and streaming services such as YouTube and Netflix have become alternatives to traditional television services.
The five largest US companies — Alphabet, Amazon, Apple, Meta and Microsoft — reached a combined market capitalisation of €8.1 trillion in 2023. This represents growth of more than 350% between 2015 and 2023. By contrast, the market capitalisation of European telecom operators declined by an average of 1.8% annually between 2014 and 2023, resulting in a total drop of about 15%.
“What is crucial from our perspective is that digital operators should be able, wherever possible, to operate under a framework similar to that of big tech companies. They should not have to compete with one hand tied behind their back because of additional regulations,” Mateusz Kowalczyk stresses.
As the report notes, telecom operators have been functioning in a highly regulated environment for more than 20 years. In the area of consumer protection alone, they are subject to obligations in 34 different areas arising from numerous legal acts.
“In the case of many services that are substitutable, operators function within a far more restrictive legal corset. There is a whole range of regulations telecom operators must comply with: from consumer rules, through sector-specific regulations in both the Polish and European markets, to numerous provisions related to data processing,” explains the report’s co-author.
The telecommunications industry is subject both to the general requirements of the General Data Protection Regulation and to additional rules arising from the ePrivacy Directive. These include the obligation to ensure the confidentiality of communications, manage traffic and location data, retain data, and notify breaches.
“Many of these provisions, such as the ePrivacy Directive or reporting obligations linked to telecom sector regulation, do not apply to big tech companies. Some regulations, such as the Digital Services Act and the Digital Markets Act, are not yet fully implemented. This process has only recently begun,” says Mateusz Kowalczyk. “Big tech companies were therefore able to develop their services in a much more liberal regulatory environment for more than 20 years. Operators, by contrast, operated in a fairly rigid environment, which naturally limited their capabilities in this respect.”
The authors of the report point out that for years global internet platforms remained almost beyond the reach of national regulators. Poland’s Office of Competition and Consumer Protection and the Personal Data Protection Office could intervene only to a limited extent. They lacked the appropriate legal tools and powers, while the operations of big tech companies were largely cross-border in nature. New EU regulations, such as the GDPR, the DSA and the DMA, are beginning to create a framework that enables more effective enforcement of requirements on global digital platforms.
One of the report’s recommendations is to level the competitive playing field between telecom operators and global digital platforms. Experts argue that similar services should be subject to similar requirements so that users are guaranteed a comparable level of protection and companies face comparable obligations.
“The key here is balance, for example by deregulating certain aspects of how operators function. If we see a need to ensure greater data privacy or better user protection awareness, then this should also be ensured in relation to other services. All of this should be addressed depending on the specific area. But from a competitiveness standpoint, moving in the direction of deregulation is a better solution,” believes the Arthur D. Little expert.
The analysts note in the report that, compared with the broader EU market, the Polish telecommunications market faces a greater degree of regulatory detail in certain areas. In Poland, the phenomenon of gold-plating — the excessive expansion of EU rules during their implementation into national law — is particularly visible.
“The same EU-level regulations are specified in different ways across different countries. In Poland, this may involve obligations such as sending information to users on a durable medium or a number of other issues which seem minor, but add complexity to the operating environment. There is definitely room for improvement here,” explains Mateusz Kowalczyk.
Among the additional obligations imposed on Polish operators is, for example, the requirement to obtain prior consent for services allowing subscribers to add the cost of online purchases to their telecommunications bill.
“The second area concerns fiscal burdens. We see potential, for example, to direct fees related to auctions more towards reinvestment and infrastructure development rather than merely maximising short-term budget revenues. A range of analyses shows that faster telecommunications development also means higher long-term budget revenues,” the report’s co-author explains.
The report shows that, as a result of fiscal obligations, Polish operators incurred a number of charges in 2024, including those related to the right to use frequencies. These costs amounted to nearly PLN 2 billion. Contributions to the Broadband Fund totalled PLN 134.8 million, the cost of implementing the Electronic Communications Law and the Act on Combating Abuses in Electronic Communications reached PLN 183.9 million, and corporate income tax at 19% came to PLN 627.2 million.
In the context of both competition and cooperation between telecommunications operators and big tech companies, the expert also points to the need for greater diversification of services.
“We need to make greater use of European solutions, for example in the cloud sector. We are not talking about replacing big tech companies, but about competition and taking a closer look at what we have on our own doorstep,” Mateusz Kowalczyk emphasises.
