A clear position of the ECJ: zero support for zero tariff options
A zero tariff option is a commercial practice whereby an internet access provider applies a ‘zero tariff’ (or a tariff that is more advantageous) to all or part of the data traffic associated with an application or category of specific applications, offered by partners of that internet access provider. Those data are therefore not counted towards the data volume purchased as part of the basic package.
The European Court of Justice (ECJ) has issued a position on zero tariff options in three recent decisions, all dated 2 September 2021.
The ECJ was given the opportunity to do so after it received requests for preliminary rulings in the three following cases concerning the ‘Vodafone Pass’ provided by Vodafone GmbH and/or the ‘Stream On’ option provided by Telekom Deutschland GmbH:
- the Verwaltungsgericht Köln (Administrative Court, Cologne, Germany) referred to the ECJ the case C-854/19. It concerns a dispute between Vodafone GmbH and the Bundesnetzagentur (a federal agency for, amongst others, telecommunications) that raised questions with regard to roaming under Regulation 531/2012 (as amended by Regulation 2015/2120);
- the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf) referred to the ECJ the case C-5/20. It concerns a dispute between Vodafone GmbH and the Bundesverband (a federation of consumer protection organisations) that raised questions with regard to the compatibility of a clause restricting certain tethering activities for end users with Regulation 2015/2120; and
- the Verwaltungsgericht Köln (Administrative Court, Cologne) ) referred to the ECJ the case C-34/20. It concerns a dispute between Telekom Deutschland GmbH and the Bundesnetzagentur that raised questions with regard to the compatibility of a limitation on bandwidth after the activation of a zero tariff option (applied to video streaming, irrespective of whether it is streamed by partner operators or other content providers) with Regulation 2015/2120.
In all three cases, the ECJ observed that the questions were based on the assumption that the zero tariff option itself is compatible with EU (telecommunications) law.
In its decisions, the ECJ reminds the parties of Article 3 of Regulation 2015/2120, which enshrines the principles of an open internet and net neutrality, and summarises its key principles:
- paragraph 1 sets out the right of end users not only to access information and content, use applications and services, and distribute information and content, but also to provide applications and services;
- paragraph 2 establishes that agreements concluded between providers of internet access services and end users and commercial practices conducted by those providers must not limit the exercise of end users’ rights as laid down in paragraph 1; and
- paragraph 3 provides (i) that internet access providers are to treat all traffic equally, without discrimination, restriction or interference, and irrespective, inter alia, of the applications or services used; (ii) that the foregoing does not prevent internet access providers from implementing reasonable traffic management measures (in order to be deemed reasonable, such measures, first, must be transparent, non-discriminatory and proportionate, second, must not be based on commercial considerations but on objectively different technical requirements of certain categories of traffic and, third, must not monitor content or be maintained for longer than necessary); and (iii) that internet access providers must not engage in traffic management measures going beyond those that are deemed reasonable and in particular must not block, slow down, alter, restrict, interfere with, degrade or discriminate between applications or services, or specific categories thereof, save certain particular exceptions (provided for in Regulation 2015/2120).
The ECJ stresses the importance of equal and non-discriminatory treatment of traffic in the provision of internet access services and recalls that Article 3 (3) of Regulation 2015/2120 precludes any measure which runs counter to the obligation of equal treatment of traffic where such a measure is based on commercial considerations.
It subsequently concludes that a zero tariff option, such as the ‘Vodafone Pass’ and/or the ‘Stream On’ option, draws a distinction within internet traffic, on the basis of commercial considerations, by not counting traffic to partner applications towards the basic package. Such a commercial practice does not satisfy the general obligation of equal treatment of traffic, without discrimination or interference, and is therefore incompatible with Article 3 (3) of Regulation 2015/2120.
Since the zero tariff option is contrary to the obligations arising from Regulation 2015/2120 and incompatible with Article 3 (3) altogether, it follows that limitations on bandwidth, tethering or use when roaming, on account of the activation of such an option, are also incompatible with EU law.
It is now up to the referring courts to apply the clear input from the ECJ to the disputes before them. These decisions will undoubtedly have an impact on other disputes (in other Member States and with other authorities) as well.
Lydian is of course at your disposal in case of questions.