On September 15, 2020, the Court of Justice of the European Union (CJEU) delivered its first ever judgement on the interpretation of the Open Access Regulation 2015/2020 (the regulation) which enshrines the principle of net neutrality, finding a breach of the regulation in Telenor Magyarország vs Nemzeti Média- és Hírközlési Hatóság Elnök (joined cases C-39/19 and C-807/18).
By way of background, the pan-EU regulation in question came into force in 2016 and dictates that internet services providers must ensure all internet traffic is treated equally without discrimination, restriction or interference. The regulation aims to ensure that there is open internet access to everyone, which will create a system of net neutrality aimed at bolstering a level playing field on the web thus safeguarding the principle of equal treatment.
In this particular case, Telenor, a Hungarian telecom operator, offered its consumers two different zero-rated data bundles. In a nutshell, zero-rated bundles allow the consumer to use certain websites or applications without consuming any data from their bundle, meaning that such applications can be accessed unlimitedly. Once the consumer uses up his data bundle, the consumer would be able to continue using those specific applications while measures which lock up or slow down data traffic to other available applications and services, kick in.
This has become a common feature offered by mobile operators across Europe throughout the years, mainly for social media or music-streaming applications.
The Hungarian National and Telecom Authority held that these bundles did not comply with the principle of equal treatment and Telenor should stop offering this service. Through a preliminary reference made by a Hungarian Court, the CJEU was tasked with deciding if zero- rated bundles breach the regulation since they can have the effect of promoting the use of one type of application while blocking other applications once the consumer’s data runs out. Do such measures fall foul of the net neutrality principle?
CJEU’s ruling will see internet service providers modifying their current plans
First and foremost, the CJEU gave an interpretation of Article 3 of the regulation, the main point of focus which safeguards open internet access and prevents discriminatory access. It held that Article 3(1) and 3(2) which regard the rights of consumers, clearly state that they generally cannot be subject to restrictions or limitations. Article 3 goes on to state that internet service providers may in certain cases limit traffic by implementing reasonable traffic management measures. However, the regulation makes it clear that such measures are not to be used capriciously, but must be transparent, non-discriminatory and proportionate, and are not to be based on commercial considerations.
The CJEU, when investigating the particular context of the case, held that the conclusion of these zero-rated bundles, which combine a ‘zero tariff’ with measures blocking or slowing down traffic linked to the use of ‘non-zero tariff’ services, are liable to limiting the exercise of end-users’ rights. The commercial agreements will end up having the likely result of increasing the use of favoured applications while reducing the use of the other applications available. If measures blocking or slowing down traffic are based on commercial considerations, they are incompatible with Article 3 of the regulation and serve to undermine the EU’s net neutrality rules.
The CJEU also noted that it is not necessary or required by the regulation that an assessment of the effects that the measures of blocking or slowing down of traffic is carried out, as traffic measures for commercial considerations must be regarded as automatically incompatible.
The judgement has already been received well by net neutrality advocates. Some commented that this judgement is important as it helps telecom companies ensure that what they offer falls within the parameters of the regulation and stops them from deviating from the EU’s net neutrality rules. Likewise, others have held that the CJEU’s ruling will have long-lasting implications and will see internet service providers modifying their current plans to ensure that they are in line with this interpretation of the regulation.
This judgement is significant for the simple reason that it has closed a loophole that existed in the regulation, showing that zero-rated data bundles undermines the principle of net neutrality while providing national digital watchdogs with a better interpretation and understanding of the regulation.
Chris Grech is a masters of advocacy student.