Vodafone (Electronic communications - Open internet access - End users' rights - Judgment) [2021] EUECJ C-5/20 (02 September 2021)

Judgment This request for a preliminary ruling concerns the interpretation of Article 3(1) and (2) of Regulation (EU) 2015/2120 of the European Parliament and of the Council of 25 November 2015 laying down measures concerning open internet access and amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services and Regulation (EU) No 531/2012 on roaming on public mobile communications networks within the Union (OJ 2015 L 310, p. 1). The request has been made in proceedings between Bundesverband der Verbraucherzentralen und Verbraucherverbände – Verbraucherzentrale Bundesverband eV (Federal Union of Consumer Organisations and Associations; ‘the Bundesverband’) and Vodafone GmbH concerning the latter’s use of certain standard terms in its contracts. Legal context Recitals 6, 8 and 9 of Regulation 2015/2120 state: ‘(6) End-users should have the right to access and distribute information and content, and to use and provide applications and services without discrimination, via their internet access service. … … (8) When providing internet access services, providers of those services should treat all traffic equally, without discrimination, restriction or interference, independently of its sender or receiver, content, application or service, or terminal equipment. According to general principles of Union law and settled case-law, comparable situations should not be treated differently and different situations should not be treated in the same way unless such treatment is objectively justified. (9) The objective of reasonable traffic management is to contribute to an efficient use of network resources and to an optimisation of overall transmission quality responding to the objectively different technical quality of service requirements of specific categories of traffic, and thus of the content, applications and services transmitted. Reasonable traffic management measures applied by providers of internet access services should be transparent, non-discriminatory and proportionate, and should not be based on commercial considerations. The requirement for traffic management measures to be non-discriminatory does not preclude providers of internet access services from implementing, in order to optimise the overall transmission quality, traffic management measures which differentiate between objectively different categories of traffic. Any such differentiation should, in order to optimise overall quality and user experience, be permitted only on the basis of objectively different technical quality of service requirements (for example, in terms of latency, jitter, packet loss, and bandwidth) of the specific categories of traffic, and not on the basis of commercial considerations. Such differentiating measures should be proportionate in relation to the purpose of overall quality optimisation and should treat equivalent traffic equally. Such measures should not be maintained for longer than necessary.’ Article 1 of that regulation, entitled ‘Subject matter and scope’, provides, in paragraph 1 thereof: ‘This Regulation establishes common rules to safeguard equal and non-discriminatory treatment of traffic in the provision of internet access services and related end-users’ rights.’ Article 3 of that regulation, entitled ‘Safeguarding of open internet access’, states, in paragraphs 1 to 3 thereof: ‘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, and only for as long as necessary, in order to: (a) comply with Union legislative acts, or national legislation that complies with Union law, to which the provider of internet access services is subject, or with measures that comply with Union law giving effect to such Union legislative acts or national legislation, including with orders by courts or public authorities vested with relevant powers; (b) preserve the integrity and security of the network, of services provided via that network, and of the terminal equipment of end-users; (c) prevent impending network congestion and mitigate the effects of exceptional or temporary network congestion, provided that equivalent categories of traffic are treated equally.’ The dispute in the main proceedings and the questions referred for a preliminary ruling The Bundesverband is a federation of the 16 consumer protection organisations of the Länder and other organisations active in the field of consumer protection in Germany. Vodafone is an undertaking which operates in the information and communications technology sector. It offers its customers, in addition to a basic package, subscriptions to free ‘zero tariff’ options called ‘Vodafone Pass’ (‘ Video Pass ’, ‘ Music Pass ’, ‘ Chat Pass ’ and ‘ Social Pass ’). Those tariff options permit the use of services of Vodafone’s partner undertakings without the data volume consumed by using those services being deducted from the data volume included in the basic package. However, the reduction in transfer speed provided for when the data volume included in the basic package is used up applies also to the use of the partner undertakings’ services. The first tariff option chosen is already included in the basic package, and customers can subscribe to other tariff options on payment of a surcharge. For those tariff options, the general terms and conditions of the contract include, inter alia, the following standard term: ‘Data consumption upon usage via tethering (hotspot) … is counted towards the [basic] tariff data volume.’ The Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen (Federal Agency for Electricity, Gas, Telecommunications, Post and Rail Networks, Germany; ‘the Bundesnetzagentur’), acting as supervisory authority, terminated a procedure concerning the legality of that term. The Bundesverband brought an action before the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany), seeking to prohibit the use of the abovementioned term. That court, having heard the Bundesnetzagentur, dismissed that action on the ground that tethering was not contractually excluded and, moreover, remained technically possible. An appeal was brought before the referring court, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf, Germany), which has doubts as regards the validity of that term in the light of Article 3(1) and (2) of Regulation 2015/2120. In those circumstances, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf), taking the view that an interpretation of EU law is necessary in order to resolve the dispute in the main proceedings, decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Is Article 3(1) of [Regulation 2015/2010] to be interpreted as meaning that the right of end users to use terminal equipment of their choice via their internet access service also includes the right, where the internet access service is provided via terminal equipment (e.g., smartphone, tablet) connected directly to the public telecommunications network interface, to also use that internet access service with other terminal equipment (e.g., other tablet, smartphone) (tethering)? (2) If Question 1 is answered in the affirmative: Is Article 3(1) and (2) of that regulation to be interpreted as meaning that there will be an impermissible limitation of the end user’s choice of terminal equipment where tethering is neither contractually prohibited nor technically restricted, but is, on the basis of an agreement on data volumes used via tethering and unlike data volumes used without tethering, not covered by a zero-cost tariff but offset against a basic volume and calculated separately in the event that that basic volume is exceeded?’ Consideration of the questions referred By its questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 3 of Regulation 2015/2120 must be interpreted as meaning that a limitation on tethering for end users, on account of the activation of a ‘zero tariff’ option, is incompatible with the obligations arising from Article 3(1) and (2). As a preliminary point, it must be noted that a ‘zero tariff’ option is a commercial practice whereby an internet access provider applies a ‘zero tariff’, or a tariff that is more advantageous, to all or part of the data traffic associated with an application or category of specific applications, offered by partners of that access provider. Those data are therefore not counted towards the data volume purchased as part of the basic package. Such an option, offered in the context of limited packages, thus allows internet access providers to increase the attractiveness of their offer. Thus, the questions referred to the Court, which seek to enable the referring court to rule on the legality of the terms of use attached to a ‘zero tariff’ option, are based on the premiss that such a tariff option would itself be compatible with EU law, in particular Article 3 of Regulation 2015/2120, by which the legislature intended to enshrine the principles of an open internet and internet neutrality. Article 3(1) of Regulation 2015/2120, read in conjunction with recital 6 of that regulation, sets out the right of end users not only to access information and content, use applications and services, and distribute information and content, but also to provide applications and services. In accordance with Article 3(2) of Regulation 2015/2120, first, agreements concluded between providers of internet access services and end users and, second, commercial practices conducted by those providers must not limit the exercise of end users’ rights as laid down in Article 3(1) of that regulation. Article 3(3) of Regulation 2015/2120 provides, first of all, in the first subparagraph thereof, that providers of internet access services are to treat all traffic equally, without discrimination, restriction or interference, and irrespective, inter alia, of the applications or services used. Article 3(3) states, next, in the second subparagraph thereof, that the first subparagraph thereof is not to prevent providers of internet access services from implementing reasonable traffic management measures, and clarifies that, in order to be deemed to be reasonable, such measures, first, must be transparent, non-discriminatory and proportionate, second, must not be based on commercial considerations but on objectively different technical requirements of certain categories of traffic and, third, must not monitor content or be maintained for longer than necessary. Lastly, the third subparagraph of Article 3(3) states that providers of internet access services must not engage in traffic management measures going beyond those set out in the second subparagraph thereof, and must not in particular block, slow down, alter, restrict, interfere with, degrade or discriminate between applications or services, or specific categories thereof, except as necessary, for a fixed period, in order (i) to comply with Union legislative acts, national legislation that complies with Union law or measures giving effect to such Union legislative acts or national legislation, (ii) to preserve the integrity and security of the network, of services provided via that network, and of the terminal equipment of end users or (iii) to prevent network congestion and mitigate the effects thereof. As is apparent from Article 1 of Regulation 2015/2120, those various provisions seek to safeguard equal and non-discriminatory treatment of traffic in the provision of internet access services and related end users’ rights (see, to that effect, judgment of 15 September 2020, Telenor Magyarország , C‑807/18 and C‑39/19, EU:C:2020:708 , paragraphs 23 to 27). In the first place, it is important to recall that the Court has had occasion to state that, where the conduct of a provider of internet access services is incompatible with Article 3(3) of Regulation 2015/2120, it is possible to refrain from determining whether that conduct complies with the obligations arising from Article 3(2) of that regulation (see, to that effect, judgment of 15 September 2020, Telenor Magyarország , C‑807/18 and C‑39/19, EU:C:2020:708 , paragraph 28). Consequently, a failure to fulfil the obligation of equal treatment of all traffic cannot be justified under the principle of freedom of contract, recognised in Article 3(2) of that regulation. In the second place, the Court has also pointed out that Article 3(3) of Regulation 2015/2120 precludes any measure which runs counter to the obligation of equal treatment of traffic where such a measure is based on commercial considerations. First of all, it must be noted that, as is apparent from paragraph 18 of the present judgment, the first subparagraph of Article 3(3) of Regulation 2015/2120, read in the light of recital 8 of that regulation, imposes on providers of internet access services a general obligation of equal treatment, without discrimination, restriction or interference with traffic, from which derogation is not possible in any circumstances by means of commercial practices conducted by those providers or by agreements concluded by them with end users (judgment of 15 September 2020, Telenor Magyarország , C‑807/18 and C‑39/19, EU:C:2020:708 , paragraph 47). Next, it is apparent from the second subparagraph of Article 3(3) of Regulation 2015/2120, and from recital 9 of that regulation, in the light of which that subparagraph must be read, that, while being required to comply with that general obligation, providers of internet access services are still able to adopt reasonable traffic management measures. However, that possibility is subject to the condition, inter alia, that such measures are based on ‘objectively different technical quality of service requirements of specific categories of traffic’, and not on ‘commercial considerations’. In particular, any measure of a provider of internet access services in respect of an end user which, without being based on such objective differences, results in the content, applications or services offered by the various content, applications or services providers not being treated equally and without discrimination, must be regarded as being based on such ‘commercial considerations’ (judgment of 15 September 2020, Telenor Magyarország , C‑807/18 and C‑39/19, EU:C:2020:708 , paragraph 48). A ‘zero tariff’ option, such as that at issue in the main proceedings, draws a distinction within internet traffic, on the basis of commercial considerations, by not counting towards the basic package traffic to partner applications. Consequently, such a commercial practice does not satisfy the general obligation of equal treatment of traffic, without discrimination or interference, laid down in the first subparagraph of Article 3(3) of Regulation 2015/2120. It should be pointed out that that failure, which results from the very nature of such a tariff option on account of the incentive arising from it, persists irrespective of whether or not it is possible to continue freely to access the content provided by the partners of the internet access provider after the basic package has been used up. Moreover, it matters little that such an option falls within the scope of an agreement, within the meaning of Article 3(2) of Regulation 2015/2120, as recalled in paragraph 23 of the present judgment, or that it is intended to meet actual demand on the part of the customer or content provider. Lastly, the exceptions provided for management measures cannot be taken into consideration since, in accordance with the second subparagraph of Article 3(3) of Regulation 2015/2120, such measures cannot be based on commercial strategies pursued by the internet access provider. It is apparent from the information provided by the referring court that the limitation on tethering, to which all the questions put by that court relate, applies solely on account of the activation of the ‘zero tariff’ option. Since such a tariff option is contrary to the obligations arising from Article 3(3) of Regulation 2015/2120, that incompatibility remains, irrespective of the form or nature of the terms of use attached to the tariff options on offer, such as the limitation on tethering in the dispute in the main proceedings. In the light of all the foregoing considerations, the answer to the questions referred is that Article 3 of Regulation 2015/2120 must be interpreted as meaning that a limitation on tethering, on account of the activation of a ‘zero tariff’ option, is incompatible with the obligations arising from Article 3(3). Costs Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Eighth Chamber) hereby rules: Article 3 of Regulation (EU) 2015/2120 of the European Parliament and of the Council of 25 November 2015 laying down measures concerning open internet access and amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services and Regulation (EU) No 531/2012 on roaming on public mobile communications networks within the Union must be interpreted as meaning that a limitation on tethering, on account of the activation of a ‘zero tariff’ option, is incompatible with the obligations arising from Article 3(3). [Signatures] * Language of the case: German. © European Union The source of this judgment is the Europa web site. The information on this site is subject to a information found here: Important legal notice . This electronic version is not authentic and is subject to amendment. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII