Top EU court backs net neutrality rules in landmark Hungarian case

Witek added that many EU member states are in a similar situation where their national tribunals ruled the superiority of national law over the EU law and that had been recognised. [Shutterstock]

The European Court of Justice (ECJ) has taken a stand in support of EU net neutrality rules in a case probing ‘zero-tariff’ deals, which give preferential treatment to the use of certain popular web applications such as Spotify, Netflix and Facebook.

It is the first time that the EU’s highest court has delivered a ruling on the bloc’s ‘open internet’ regulation, designed to guarantee the equal treatment of internet traffic.

In a preliminary judgement on Tuesday (15 September), the court stated that Hungary’s telecom Telenor had infringed the EU’s regulation on open Internet access, which prohibits the blocking, throttling and discrimination of internet traffic by service providers in the EU.

Telenor had been selling packages in which data traffic generated by certain specific applications did not count towards the consumption of data volume purchased by customers.

Such ‘zero tariffs’ deals, which promote the data consumption of certain apps over others, were the cause of the original complaint, which had been brought by the Hungarian Media and Communications Office.

On Tuesday, the ECJ said that such packages contravene protections outlined in the EU’s ‘net neutrality’ rules, with particular reference to Article 3 of the regulation.

The court’s ruling said Article 3 “prohibits providers of such services from putting in place agreements or commercial practices limiting the exercise of those rights,” and which establishes an obligation of equal and non-discriminatory treatment of web traffic.

The ‘zero tariffs’ products offered by Telenor “are liable to increase the use of the favoured applications and services and, accordingly, to reduce the use of the other applications and services available,” the court said, adding that such deals are also inclined to result in an exponential erosion of rights outlined in the regulation.

“The greater the number of customers concluding such agreements, the more likely it is that, given its scale, the cumulative effect of those agreements will result in a significant limitation of the exercise of end-users’ rights,” the Court found.

The decision received broad support on Tuesday, as digital activists and consumer groups alike praised the decision that is hoped will allow for a more competitive market for web applications, as well as guaranteeing user rights.

“The ruling means that users have a right to a full experience of the Internet rather than being trapped in a walled garden of permissible services”, Christoph Schmon, international policy director of the Electronic Frontier Foundation (EFF), told EURACTIV.

Meanwhile, Maryant Fernandez, senior digital policy officer at BEUC, the EU consumer group, spoke about how the decision would be beneficial in terms of safeguarding consumer choice.

“We welcome this judgment. It draws a very strong red line for telco companies who try to deviate from the EU’s net neutrality rules,” she said.

“Zero-rating is detrimental to consumers, it compromises their freedom of choice. It’s the very purpose of net neutrality that consumers can access everything the internet has to offer.”

In terms of the future legal ramifications of the ruling, ‘zero-tariff’ packages offered by service providers across the EU are likely to be directly impacted, so that consumers could be offered a range of different deals for their data consumption allowances.

“The ruling will undoubtedly lead to modifications to service provider offerings on a zero-tariff basis, as well as addressing the importance of conducting user rights assessments when it comes to the regulation,” Barrister Ronan Lupton, chair of the Irish Association of Licensed Telecommunications Operators (ALTO), told EURACTIV.

“The implications for both industry and regulators are likely to be significant. The industry has to review tariff practices to sync up with the ruling.”

[Edited by Zoran Radosavljevic]

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