20 September 2020 by

Telenor Magyarország Zrt. Jv Nemzeti Média- és Hírközlési Hatóság Elnöke, Joined Cases  C‑807/18 and C‑39/19

The CJEU has dominated, in a primary for that regulation, that using “Zero Tariff” contracts are inconsistent with its “Open Web” regulation (Regulation 2015/2120). The regulation “goals to ascertain widespread guidelines to safeguard equal and non-discriminatory remedy of site visitors within the provision of web entry providers and finish customers’ rights”. Its intention is to legally set up the precept of ‘Web Neutrality’, whereby web entry suppliers are prohibited from giving preferential remedy (for instance, limiting entry or rising site visitors speeds) to particular web sites and customers.

The difficulty on this case was whether or not zero tariff contracts provided by Telenor, an Hungarian web entry supplier, contravened web neutrality regulation. Zero tariff contracts present knowledge allowances to their customers, (1 GB, for example), which the buyer is allowed to make use of as they please. On working out of information, sometimes web entry could be stopped. Nevertheless, in its two zero tariff contracts, referred to as MyChat and MyMusic, sure web sites and functions didn’t run down the info allowance. Moreover, even as soon as the info allowance had been used up, the identical web sites and functions may nonetheless be accessed, though in any other case no web entry was offered. 

Regulation 2015/2120 enacts the precept of web neutrality. The thought behind web neutrality is that web service suppliers shouldn’t be allowed to discriminate between several types of site visitors by way of the standard of chance of service. BT, for instance, shouldn’t be allowed to extend speeds to Netflix whereas throttling speeds to YouTube.  

In accordance with the regulation, the intention is to “defend finish customers and concurrently… assure the continued functioning of the web ecosystem as an engine of innovation”. If BT have been to deal with Netflix or any of service preferentially, different industrial ventures counting on web entry to attach with clients could be unfairly deprived. The purpose, subsequently, is to make sure that shoppers benefit from the fruits of continued innovation whereas no suppliers are unfairly deprived. The Courtroom thought-about the query of whether or not zero tariff contracts violated the rules of the regulation by offering limitless entry to specified providers, however to not the remainder of the web.

Key to the argument of the court docket is knowing the idea of an finish consumer. An web entry supplier’s operate is to attach a client with a service supplier of 1 sort or one other. Finish customers are each the buyer and the service supplier (at both finish of the connection). The intention of the regulation, to guard “finish customers’ rights”, subsequently refers to each shoppers and suppliers. 

The vital areas of regulation 2015/2120 for the case have been in article 3. Article 3.1 states that:

“Finish customers shall have the suitable to entry and distribute info and content material, use and supply functions and providers, and use the terminal tools of their selection, regardless of the tip consumer’s or supplier’s location or the placement, origin, or vacation spot of the knowledge, content material, utility or service, by way of their web entry service.”

Article 3.2 states that the industrial agreements reached between entry suppliers and finish customers “shall not restrict the train of the rights of finish customers laid down in paragraph 1”.

Article 3.3, the strongest affirmation of the rights of finish customers to web neutrality, states that 

“suppliers of web entry providers shall deal with all site visitors equally… with out discrimination, restriction, restriction of interference, regardless of the sender and receiver, the content material accessed or distributed, the functions or providers used or offered”. 

The remainder of 3.Three particulars how web entry suppliers can use site visitors administration measures (dashing up or slowing down, or blocking entry fully), so long as they’re used to resolve technical points to “protect the integrity and safety of the community”. Nevertheless, it reiterates that solely technical considerations concerning the performance of the community can justify site visitors administration measures like these, and never industrial considerations. 

The ultimate piece of the regulation that’s important is recital 7, which states that nationwide enforcement our bodies are empowered to intervene the place industrial agreements violate finish customers’ rights “by cause of their scale”, suggesting that intervention is barely justified by a big materials impact on finish customers’ rights. 

The priority of the Courtroom was whether or not, by permitting limitless entry to sure web sites and functions, Telenor was violating the rules of web neutrality. Telenor argued that zero tariff contracts have been lined by article 3.2, as a industrial settlement, to the exclusion of three.3. It argued that 3.Three solely lined “site visitors administration measures applied unilaterally by suppliers of web entry providers”, whereas their zero tariff contracts solely affected those that had entered into them. As such, the blanket ban on non-technical site visitors administration measures laid down in 3.Three was not relevant to their zero tariff contracts. What was mandatory was to “assess [zero tariff contracts’] results on the train of finish customers’ rights”, to establish whether or not they impacted on the rights set out in 3.1.

The nub of the case comes down to 2 points: first, whether or not the provisions in article 3.2 require an affect on finish customers’ rights to be assessed and confirmed earlier than article 3.1 is activated; secondly, whether or not 3.Three might be learn purely formally as laying a blanket ban on all discriminatory remedy of site visitors, regardless of the precise affect on finish customers’ rights could also be. The Courtroom concluded that zero tariff contracts have been inconsistent with the regulation in each methods.

Within the first case, the Courtroom concluded that zero tariff contracts sufficiently restricted site visitors for there to be an interference with finish customers’ rights “by cause of their scale”. Visitors was both incentivised to sure websites and functions, earlier than the info quotas have been used up, or utterly restricted, after they have been used up. This was important sufficient for the court docket to find out an interference with finish customers’ rights. Specifically, the Courtroom had in thoughts industrial providers which might have been inaccessible when the info allowance was used up. As such, each 3.1 and three.2 have been engaged on this case, adequate to show that zero tariff contracts are incompatible with regulation 2015/2120. The Courtroom famous that arguments on this vein would require case by case scrutiny by the related nationwide authorities to conclude whether or not finish customers’ rights have been violated attributable to “scale”.

The Courtroom additionally concluded that 3.Three imposed a normal obligation on web entry suppliers to deal with all site visitors in a non-discriminatory method. It reiterated that 3.Three lays down an exhaustive record of conditions through which site visitors administration was acceptable: none of these conditions described zero tariff measures. As such, zero tariff contracts are incompatible with article 3.Three as properly. The Courtroom famous that 3.Three doesn’t lay down a requirement for an evaluation of affect on finish customers’ rights, and as such, the reasoning from 3.1 and three.2 was irrelevant. 

Zero Tariff contracts are standard with each service suppliers and shoppers, however this ruling will possible spell the tip of them. The Courtroom positioned important emphasis on the safety for suppliers as finish customers. Provided that a part of the said intention of the laws is to guard the “web ecosphere as an engine of innovation”, shoppers’ pursuits should not essentially entrance and centre. As such, this ruling might go away nationwide authorities feeling empowered to take enforcement motion in opposition to all variants of zero tariff contracts.