{"id":253897,"date":"2021-09-08T17:13:08","date_gmt":"2021-09-08T11:43:08","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=253897"},"modified":"2021-09-08T17:13:08","modified_gmt":"2021-09-08T11:43:08","slug":"eu-law","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/09\/08\/eu-law\/","title":{"rendered":"Zero Tariff v. Net Neutrality; ECJ deals a blow to Telekom\u2019s Zero Tariff regime by holding it violated EU law of Net neutrality"},"content":{"rendered":"

European Court of Justice: <\/strong>The Bench of N. Wahl (Rapporteur), F. Biltgen (President) and J. Passer, JJ., held that Telekom\u2019s Zero Tariff was violative of European rule of Net Neutrality.<\/p>\n

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\u00a0A \u2018zero tariff\u2019 option draws a distinction within internet traffic, on the basis of commercial considerations, by not counting towards the basic package traffic to partner applications. Consequently, such a commercial practice does not satisfy the general obligation of equal treatment of traffic, without discrimination or interference, as laid down in Article 3(3) of Regulation 2015\/2120.<\/p>\n<\/blockquote>\n

\u00a0<\/strong>Factual Fulcrum <\/strong><\/span><\/h3>\n

Telekom, an information and communications technology undertaking, had been offering its end customers an add-on option in the form of a free \u2018zero tariff\u2019 option called \u2018Stream On\u2019 which allowed data volume consumed by audio and video streamed by Telekom\u2019s content partners (e.g. Spotify, Netflix etc.) not to be counted towards the data volume included in the basic package. By activating the \u2018Stream On\u2019 tariff option, the end customer were to accept bandwidth being limited to a maximum of 1.7 Mbit\/s for video streaming, irrespective of whether the videos were streamed by content partners or other providers and once that data volume get used up, the transmission speed would reduce.<\/p>\n

The Federal Agency for Electricity, Gas, Telecommunications, Post and Rail Networks, Germany found that the tariff option concerned did not comply with the obligations arising from Article 3(3) of EU Regulation 2015\/2120, since it was accompanied by a reduction in the data transmission speed for video streaming to a maximum of 1.7 Mbit\/s. Hence, the Federal Agency prohibited Telekom from limiting bandwidth for video streaming covered by that tariff option and from using terms providing for a reduction in bandwidth in both contracts concluded with content providers and with end customers.<\/p>\n

\u00a0<\/strong>Question Referred<\/strong><\/span><\/h3>\n

\u00a0<\/strong>As the matter reached for annulment before the Administrative Court, Cologne, Germany, the referring Court opined that interpretation of EU regulation in this regard was required to settle the case. The referring Court asked, whether a limitation on bandwidth on account of the activation of a \u2018zero tariff\u2019 option, applied to video streaming, irrespective of whether it is streamed by partner operators or other content providers, is incompatible with the obligations arising from Article 3(3) of Regulation 2015\/2120?<\/p>\n

Zero-Tariff<\/strong><\/span><\/h3>\n

A \u2018zero tariff\u2019 option is a commercial practice whereby an internet access provider applies a \u2018zero tariff\u2019, 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 access provider. Those data are therefore not counted towards the data volume purchased as part of the basic package. Such an option, offered in the context of limited packages, thus allows internet access providers to increase the attractiveness of their offer.<\/p>\n

Net Neutrality Rule<\/strong><\/span><\/h3>\n

As per European Union\u2019s Net Neutrality rule ( enshrined under Article 3 of Regulation 2015\/2120), end-users should have right to access and distribute information and content, and to use and provide applications and services without discrimination, via their internet access service. Similarly, it requires that reasonable traffic management measures applied by providers of internet access services should be transparent, non-discriminatory and proportionate, and should not be based on commercial considerations.<\/p>\n

Under net neutrality rule, the service providers are prohibited from engaging in traffic management measures; in particular they shall not block, slow down, alter, restrict, interfere with, degrade or discriminate between specific content, applications or services, or specific categories except for a fixed period, in order<\/p>\n