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Round Two: Zero Rating Fee: Telecom and Vodafone defeat by the European Court of Justice | 02/09/21

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LUXEMBOURG (dpa-AFX) – Deutsche Telekom and Vodafone (Vodafone Group) violated European law with certain tariffs that already promised unlimited data use yet were restricted. That is the conclusion of the European Court of Justice in a ruling published Thursday. This includes so-called zero-rate options, also known as “zero-rated tariffs”, where, for example, you can stream videos on a smartphone without calculating the amount of monthly data. However, the companies set certain limits, which later withdrew under pressure from the Federal Network Agency. Legal proceedings on this continued. The European Court of Justice has now intervened.

The tariffs in question are known as “Vodafone Pass” and “Stream On” (Telekom). Although users have monthly data volume, some services are exempt from this volume limit – such as videos on the Netflix app or in the ARD media library. if

So if a customer is watching movies, they don’t have to worry that their data volume will be used up soon and that they will be charged with slow internet until the end of the month.

However, in 2017, companies hit the safety rails somewhat so that the amount of data doesn’t become too big. For example, Telekom reduced the transmission rate of films – as part of the “Stream On” tariff, they can not be viewed in HD quality, but only in SD, that is, in a lower resolution. Vodafone also enshrined this measure in its general terms and conditions, but did not take advantage of it, according to a company spokesperson.

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In addition, data consumption in other European countries in 2017 with “Stream On” and with the competing product “Vodafone Pass” was initially offset against monthly volume, although EU rules state that consumers in other European countries must Browsing on the same terms as at home (roaming like home). The two companies later rescinded this accreditation.

Another sticking point was whether Vodafone could exclude “tethering” from its tariff – if you use your mobile phone as a hotspot and connect to your tablet to watch a movie. Data consumption can increase dramatically through the use of multiple devices – Vodafone wanted to be able to put an end to that. The judges of the European Court of Justice also considered this to be illegal.

The judges’ complaints were about regulations of the past, most of which have already been resolved – only the Teterhing clause still exists in Vodafone’s terms and conditions, but according to a company spokesperson, it has never been used. After the European Court of Justice spoke, separate proceedings are taking place in two German courts – but it is now clear that companies there are at a loss.

However, the ruling could still have an impact on the current business model for zero-rated products. According to the court’s announcement: “Such commercial practice violates the general obligation set forth in the Open Internet Access Regulations to treat traffic on an equal footing without discrimination or interference.” This statement can be understood to mean, in the judges’ view, that the product is generally violating network neutrality – that is, equal treatment of data.

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The Federation of German Consumer Organizations (VZBV), which took Vodafone’s case to court, was pleased. “Today’s European Court of Justice decision against Vodafone’s card is a sign of net neutrality and a victory for consumer protection,” said VZBV Board Member Klaus Muller. The Federal Network Agency, which has also taken action against Vodafone and Telecom, announced that the court’s decisions override the orders of the Federal Network Agency. “It is therefore expected that the offerings, which were modified in 2019 by order of the Federal Network Agency, cannot be maintained in their current form.”

The two companies involved emphasized that the tariffs had changed long ago. A Telecom spokesperson said that for the current “Stream On” programme, nothing will change. “To the extent that the judgment also contains statements regarding zero-rating in general, these statements are initially irrelevant to the subject matter of the proceedings. The legislature should clarify the following.” /wdw/dp/ngu