Opinion of the Advocate General of the Court of Justice on net neutrality and zero-rating

By Raoul Grifoni Waterman

03-2020

An opinion of Advocate General ("AG") Sánchez-Bordona of the Court of Justice of the European Union ("ECJ") on net neutrality and zero-rating was published on 4 March 2020. The opinion is available in several languages, such as French and Dutch but not English (yet), here. The case submitted to the ECJ concerns two mobile telephony subscriptions of the Hungarian telecommunications service provider Telenor. Both subscriptions had a data limit but the use of certain applications did not count towards data consumption. Such subscriptions are referred to as 'zero-rated' subscriptions. In addition, both subscriptions severely slowed down the speed of data traffic once the data limit was reached, except for the zero-rated applications. The AG of the ECJ now concludes that this type of zero-rated subscriptions is in violation of European rules on net neutrality.

Case and preliminary questions

As explained above, Telenor offered two types of zero-rated subscriptions. The first was the MyChat subscription. This subscription included a data limit of 1 Gb that could be used for all Internet applications. As soon as that limit was reached, the entire Internet access became considerably slower. However, the data traffic that belonged to certain social media and messaging applications did not count towards the data limit. In addition, once the data limit was reached, the speed of all data traffic was slowed down, except for the zero-rated applications. For the MyMusic subscription most of the same applied, except that the data limit varied for that subscription.

The Hungarian National Media Authority had published decisions that both subscriptions allegedly violated European network neutrality rules. Following an appeal by Telenor, the Hungarian court referred four questions to the ECJ for a preliminary ruling. These questions were summarized by the ECJ into two main questions:

  1. Which paragraph (2) or (3) of Article 3 of Regulation 2015/2120 should be taken into account for determining whether the offers violate the European net neutrality rules (first and second questions referred for a preliminary ruling)?

  2. If Article 3(3) of Regulation 2015/2120 is applicable, does that provision impose a general, objective and unconditional prohibition (third question referred for a preliminary ruling) and, if so, must an assessment of the circumstances still be carried out in order to establish whether the rights of end users have been infringed (second and fourth questions referred for a preliminary ruling)?

Relevant legislation

The key legislation for this conclusion is Regulation 2015/2120/EU of the European Parliament and of the Council of 25 November 2015 laying down measures on open Internet access (the 'Net Neutrality Regulation'). Where relevant, Article 3 of the Net Neutrality Regulation provides:

“1. End-users shall have the right to access and distribute information and content, use and provide applications and services, and use terminal equipment of their choice, irrespective of the end-user’s or provider’s location or the location, origin or destination of the information, content, application or service, via their internet access service. […]


2. Agreements between providers of internet access services and end-users on commercial and technical conditions and the characteristics of internet access services such as price, data volumes or speed, and any commercial practices conducted by providers of internet access services, shall not limit the exercise of the rights of end-users laid down in paragraph 1.


3. Providers of internet access services shall treat all traffic equally, when providing internet access services, without discrimination, restriction or interference, and irrespective of the sender and receiver, the content accessed or distributed, the applications or services used or provided, or the terminal equipment used.

The first subparagraph shall not prevent providers of internet access services from implementing reasonable traffic management measures. In order to be deemed to be reasonable, such measures shall be transparent, non-discriminatory and proportionate, and shall not be based on commercial considerations but on objectively different technical quality of service requirements of specific categories of traffic. Such measures shall not monitor the specific content and shall not be maintained for longer than necessary.

Providers of internet access services shall not engage in traffic management measures going beyond those set out in the second subparagraph, and in particular shall not block, slow down, alter, restrict, interfere with, degrade or discriminate between specific content, applications or services, or specific categories thereof, except as necessary.”

Opinion of the Advocate General

In order to answer the questions referred for a preliminary ruling, the AG first formulates some observations. First, the AG states that the Net Neutrality Regulation has two objectives: to ensure open Internet access and to protect end-users. According to the AG, its main objective is to ensure open Internet access. Second, the AG notes that the protection of Article 3 of the Net Neutrality Regulation protects 'end-users'. That definition is not limited to consumers but also includes providers of (digital) content and applications.

Depending on the category of end-users, Telenor's zero-rated subscriptions may violate different provisions of the Net Neutrality Regulation. The subscriptions possibly violate Article 3(3) as (digital) content and applications are slowed down. In addition, the agreements with Telenor's subscribers possibly violate Article 3(2), because the subscriptions distinguish between Internet traffic. According to the AG, this distinction does not affect the consequences but only the assessment framework of the possible infringement. In order to assess whether a subscription infringes Article 3(2) of the Net Neutrality Regulation, competent authorities must carry out a comprehensive analysis of the subscription and the market positions of the subscription provider and the content providers.

The AG concludes that subscriptions should first be assessed under Article 3(3) of the Net Neutrality Regulation. The reason being that equal and non-discriminatory treatment of Internet traffic, as set out in Article 3(3), must always be protected. It is only when such protection is provided, that further restrictions of open Internet access by means of an agreement should be taken into account.

Based on the above, the AG concludes that the subscriptions offered by Telenor violate Article 3(3) of the Net Neutrality Regulation. In the AG's view, the slowing down of Internet traffic except for zero-rated applications infringes the obligation to treat Internet traffic equally and in a non-discriminatory manner. It is possible that the restriction of internet traffic does not infringe that obligation if the exceptions provided for in Article 3(3) are complied with, which is a matter for the national court to determine. If the infringement of Article 3(3) is established, the AG concludes that it is not necessary to also examine whether Article 3(2) has been infringed.

The AG's opinion is not binding on the ECJ itself. The final judgment of the ECJ may differ from the AG's opinion. The judgment will be delivered at a later date.

Study Net Neutrality Regulation

In December 2018, Bird & Bird published a study for the European Commission on the implementation of the Net Neutrality Regulation. The study provides a factual overview and analysis of the implementation and effectiveness of the Net Neutrality Regulation in all EU Member States and Norway. The overview and analysis were achieved on the basis of a thorough data collection with the help of Bird & Bird's local teams, interviews with stakeholders, the interpretation of the survey results of the research partner Ecorys and analyses of the information on countries and legislation and regulations at EU level.

Pages 62-63 of the study analyse the position of national telecommunications regulators of several EU Member States. At the time of publication of the study, regulators in ten EU Member States had taken decisions prohibiting subscriptions similar to those offered by Telenor. The regulators in three other EU Member States had also indicated in other ways that such subscriptions violated the Net Neutrality Regulation. The AG's conclusion thus appears to be in line with the practice of the national telecommunications regulators.