HomeInsightsCourt of Justice of European Union finds that offering “zero tariff” packages is contrary to the Net Neutrality Regulation (2015/2120/EU)

Article by

“Zero tariff” is when an internet access provider applies a “zero tariff”, or a more advantageous tariff than that offered by its partners, to all or part of the data associated with an application or category of applications. The “zero tariff” data is not counted towards the data volume purchased as part of the basic package.

In Case C-854/19 Vodafone GmbH v Bundesrepublik Deutschland, Case C-5/20 Bundesverband der Verbraucherzentralen v Vodafone GmbH and Case C-34/20 Telekom Deutschland GmbH v Bundesrepublik Deutschland, the German courts referred questions to the CJEU on whether offering a “zero tariff” in relation to bandwidth, tethering or when roaming, is compatible with EU law.

Vodafone’s, “zero tariff” packages, known as “Vodafone Pass” (“Video Pass”, “Music Pass”, “Chat Pass” and “Social Pass”), are only valid in the national territory, in this case Germany. The data volume consumed when using the services of Vodafone’s partners abroad is offset against the data volume included in the basic package. In addition, when using tethering (i.e., a hotspot), Vodafone counts the data consumption towards the data volume included in the package.

As for Telekom Deutschland, some of its packages include an additional option (also referred to as an “add-on option”) in the form of a “zero tariff” option called “Stream On” in which audio and video data streamed by Telekom’s content partners are not counted in the data volume included in the basic package. Further, once a consumer has used up all that data there is a reduction in transmission speed. However, by choosing that option, the end customer accepts that the bandwidth will be limited to a maximum of 1.7 Mbit/s for video streaming, irrespective of whether the videos are streamed by content partners or other providers.

The CJEU said that “zero tariff” options such as these mean that some internet data, i.e. that used in relation to partner applications, is distinguished from other internet data, as it does not count towards the basic data package. As such, the practice is contrary to the general obligation of equal treatment of traffic without discrimination or interference, as required by the open internet access provisions of the Net Neutrality Regulation. The restrictions on bandwidth, tethering and roaming that apply when a consumer chooses a “zero tariff” option are therefore incompatible with EU law. (Case C-854/19 Vodafone GmbH v Bundesrepublik Deutschland EU:C:2021:675 (2 September 2021) — to read in full, click here; Case C-34/20 Telekom Deutschland GmbH v Bundesrepublik Deutschland EU:C:2021:677 (2 September 2021) — to read in full, click here; and Case C-5/20 Bundesverband der Verbraucherzentralen und Verbraucherverbände – Verbraucherzentrale Bundesverband eV EU:C:2021:676 (2 September 2021) — to read in full, click here).

Expertise