The recent rulings of the European Court of Justice caught regulators by surprise. It is now likely that zero-rating will be significantly restricted in the EU
The ECJ strikes down traffic management based on commercial considerations: In September, three rulings of the European Court of Justice cast serious doubts on the future of zero-rating practices across the EU. The rulings made a restrictive interpretation of the European Regulation on Open Internet Access, and argued that any form of traffic management based on commercial considerations is incompatible with Article 3 of the Regulation which defines what “reasonable” traffic management is. The ECJ’s decisions will now have to be taken into account by two courts in Germany, which are ruling on specific cases of zero-rated offers of Deutsche Telekom and Vodafone.
Regulators across the EU have generally permitted zero-rating: The ECJ’s rulings go against the interpretation of the Regulation that most regulators have adopted so far. Tariffs with zero-rated content have been very common across the EU, and only a small minority of offers have faced regulatory scrutiny. Our Net Neutrality and Zero Rating Tracker shows that only 20 cases have been formally investigated. Of these, only three were blocked altogether, whereas seven were cleared, and 10 were authorised subject to changes to the offer being made. In many of these cases, the problem was that zero-rating needed to be available to customers while roaming, effectively requiring operators to extend its scope rather than reduce it.
BEREC is unsure how to change the guidance: The Body of European Regulators for Electronic Communications (BEREC) only revised its guidelines for the application of the Regulation last year. However, shortly after the ECJ’s rulings BEREC stated it would consider a new review due to the potential consequences of these judgments. On Wednesday, following the latest plenary meeting, BEREC confirmed it will update them, but it is still highly uncertain as to how. All BEREC has said so far is that the extent of this change requires “further scrutiny, as it brings up all kinds of legal questions”, but it is already clear that fewer instances of zero-rating will be allowed than under the current guidelines. The review will be carried out in close cooperation with the European Commission and limited to zero-rating. BEREC is seeking preliminary input from stakeholders until 20 October. It plans to consult on the new draft guidelines in March 2022, and to approve them by June 2022.
