EU court rules zero tariff offers violate open internet, roaming provisions

The Court of Justice of the European Union was called to express an opinion on two German cases concerning Deutsche Telekom and Vodafone respectively. [vchal/Getty Images]

The EU court ruled on Thursday (2 September) that unlimited streaming offers from Vodafone and Deutsche Telekom violate EU roaming and net neutrality rules.

The European Court of Justice (ECJ) found that ‘zero tariff’ options offered by telecommunication service providers Vodafone and Deutsche Telekom in Germany breach the EU laws on Open Internet and Roaming.

Such a commercial practice is contrary to the general obligation of equal treatment of traffic, without discrimination or interference, as required by the regulation on open internet access.

The legal proceedings were started by Germany’s Federal Network Agency (BNetzA) against Deutsche Telekom’s StreamOn deal, which enabled consumers to receive unlimited data for streaming at the cost of a slower internet connection abroad. Given the limited geographical location, the German authority urged Telekom to extend the offer to all EU countries.

The Federation of German Consumer Organisations (VZBV) initiated a parallel lawsuit against Vodafone for a similar offer. The German courts referred both cases to the ECJ for its opinion.

“Such a commercial practice is contrary to the general obligation of equal treatment of traffic, without discrimination or interference, as required by the regulation on open internet access,” reads the ECJ’s judgement.

“Since those limitations on bandwidth, tethering or on use when roaming apply only on account of the activation of the ‘zero tariff’ option, which is contrary to the regulation on open internet access, they are also incompatible with EU law,” the EU’s top court concluded.

The argument of telecom operators is that the result of the ruling would end certain tariffs that provide consumers unlimited access to specific apps, even when their subscription allowance is finished.

Estelle Masse, senior policy analyst at Access Now, disagreed with that argument and welcomed the court’s ruling that zero rating products are incompatible with EU law.

“Zero rating is a threat to the open internet and … would result in discriminatory access,” she said.

Telecom expert Innocenzo Genna told EURACTIV he thought the companies had tried to force the hand of the national regulator, hoping the ECJ would rule that some form of zero rating would always be allowed.

For Genna, these expectations were frustrated because “internet traffic cannot be discriminated on the basis of simple commercial considerations. This is the core of the Open Internet regulation and operators should not forget it.”

However, the EU court ruling does not automatically prohibit zero rating, its legitimacy depends on the detrimental effect the commercial practice has on consumers. Such impact is assessed by the national authorities, in this case the BNetzA and the German national courts.

“The decisions of the ECJ go beyond the orders of the [German Federal Network Agency] Bundesnetzagentur. It is, therefore, to be expected that the offers that were adjusted in 2019 by order of the Bundesnetzagentur cannot be maintained in their current form,” a BNetzA spokesperson said.

A Vodafone Germany spokesperson told EURACTIV that the company “is carefully reviewing the decisions and will update its current offering as required, in accordance with the rulings.”

A Deutsche Telekom spokesperson meanwhile said the bandwidth adjustment for video streams the ECJ deemed to be illegal is already no longer part of the company’s StreamOn offer.

“Insofar as the ruling also contains statements on zero-rating in general, these initially have nothing to do with the subject matter of the proceedings. What follows from this must be clarified by the legislator,“ the Telekom spokesperson added.

[Edited by Josie Le Blond]

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