Technolgy Rules: Europe’s top court slaps down ‘zero rating’ again

Thursday, September 2, 2021

Europe’s top court slaps down ‘zero rating’ again

Europe’s top court has dealt another blow to ‘zero rating’ — ruling for a second time that the controversial carrier practice goes against the European Union’s rules on open Internet access.

‘Zero rating’ refers to commercial offers that can be made by mobile network operators to entice customers by excluding the data consumption of certain (often popular) apps from a user’s tariff.

The practice is controversial because it goes against the ‘level playing field’ principle of the open Internet (aka ‘net neutrality’).

EU legislators passed the bloc’s first set of open Internet/net neutrality rules back in 2015 — with the law coming into application in 2016 — but critics warned at the time over vague provisions in the regulation which they suggested could be used by carriers to undermine the core fairness principle of treating all Internet traffic the same.

Some regional telcos have continued to put out zero rating offers — which has led to a number of challenges to test the robustness of the law. But the viability of zero rating within the EU must now be in doubt given the double slap-down by the CJEU.

In its first major decision last year — relating to a challenge against Telenor in Hungary — the court found that commercial use of zero rating was liable to limit the exercise of end users’ rights within the meaning of the regulation.

Its ruling today — which relates to a challenge against zero rating by Vodafone and Telekom Deutschland in Germany (this time with a roaming component) — comes to what looks like an even clearer conclusion, with the court giving the practice very short shrift indeed.

“By today’s judgments, the Court of Justice notes that a ‘zero tariff’ option, such as those at issue in the main proceedings, draws a distinction within internet traffic, on the basis of commercial considerations, by not counting towards the basic package traffic to partner applications. 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,” it writes in a (notably brief) press release summarizing the 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,” it added.

We’ve reached out to Vodafone and Telekom Deutschland for comment on the ruling.

In a statement welcoming the CJEU’s decision, the European consumer protection association BEUC’s senior digital policy officer, Maryant Fernández Pérez, subbed the ruling “very positive news for consumers and those who want the internet to stay open to all”.

“When companies like Vodafone use these ‘zero tariff’ rates, they essentially lock-in consumers and limit what the Internet can offer to them. Zero-rating is detrimental to consumer choice, competition, innovation, media diversity and freedom of information,” she added.