Does using a VPN increase traffic for your ISP? I would think it's roughly the same amount of traffic, just encrypted from the ISPs perspective. Things take a longer route to get to your final destination and back, but it's not the traffic on the ISP that is increased. Unless encrypted data is much larger than unencrypted data.

It's changes the data flow. Transit connections are magnitudes expensive than local exchanges, and you can even connect to neighborhood country exchanges on lower prices than serve all TikTok through Ams/Fra. Since VPN is encrypted you can't reroute its content by your rules.

Also mentioned here, larger corps have local caches which unloads transit significantly. Google does this for YouTube everywhere.

It does, but mostly in an indirect way.

See, companies that deal with a lot of traffic on static data have geographically distributed caches.

Let's say Steam has a major game release, and gets slammed with the DL traffic of 5 million gamers all around the world trying to get their hands at that new game all at once. However, Steam has an instruction manual that allows any ISP to set up their own cache servers. So an ISP that has a cache set up can convert a lot of that global traffic to local traffic, saving them money, and offering users a better experience.

(One small ISP I knew had it set up so that all traffic to their local Steam cache was fully exempt from client rate limiting, reportedly because the ISP's admins were avid gamers.)

Other services like major CDNs, YouTube or Netflix may have deals with ISPs to locate their caching hardware on ISP premises, or may buy their own caching servers in specific datacenters. Same idea applies - it's cheaper for both ISPs and web services when the users hit local caches than when they "cache miss" and generate global traffic.

VPN use is a "forced cache miss", so it's a loss-loss for both ISPs and web services.

~10% overhead, is that significant for the ISP? Don't know.