Meta announced that it’s ending its direct peering relationship with Deutsche Telekom following a court’s ruling earlier this year that would oblige the tech firm to pay the telecom €20,000,000 to continue using its network.

Instead, Meta will now re-route traffic from its platforms and services (Facebook, Instagram, WhatsApp)  through third-party providers instead of directly through Deutsche Telekom.

This move is expected to increase the risk of network latency, congestion, reduced performance/quality, and service disruptions for Deutsche Telekom subscribers using Meta’s platforms. However, Meta says it hopes the German telecom firm will take measures to mitigate these risks.

How Meta and Deutsche Telekom reached a dead end

The issue revolves around how data traffic is exchanged between Meta’s platforms and Deutsche Telekom’s network.

Typically, these relationships are “settlement-free,” meaning both parties have equipment located at a common Internet exchange point (IXP) or have a direct connection between each other’s networks and exchange data without charging each other.

However, in 2022, Deutsche Telekom demanded payment for the data Meta sends through its network after a previous agreement between the companies ended, and the amount of traffic the ISP handled for Meta was extraordinarily large compared to what it was sending.

According to German media reports, the contract dictated that Deutsche Telekom would dedicate 24 private interconnection points with 50 ports and 5,000 gigabits/s data rates at 7 locations for the exclusive use of the Meta services, for which Meta paid €5,800,000/year, between 2010 and 2020.

When the contract ended, Meta declined to renew it, proposing a transition to a settlement-free model instead. However, Meta continued to send traffic through the peering connection and reportedly refused to pay invoices sent by DT under the terms of the previous agreement.

Deutsche Telekom sued them, and in May 2024, the Regional Court of Cologne ruled in its favor. According to the ruling, Meta would have to pay Deutsche Telekom €20M to continue using its network, which Meta has not accepted.

Meta argues that this ruling and Deutsche Telekom’s stance set a dangerous precedent and threaten net neutrality and open internet standards that contribute to great consumer experiences.

The social media giant also notes that it has invested over €27 billion in global infrastructure in 2022 alone, which lessens the load on telecom providers and essentially reduces their costs.

This case has significant implications for net neutrality, as Deutsche Telekom argues that not charging large companies for their disproportionately heavy use of networks puts undue financial pressure on telecom providers, which could result in higher costs for consumers or reduced investment in network infrastructure.

Ultimately, the loss from the two failing to reach an agreement will burden both Deutsche Telekom’s subscribers and Meta’s members, who will now have their traffic re-routed through additional service providers, with all the drawbacks that come from this.