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Dutch court strikes down regulator's attempt to ban zero rating

Summary

On 20 April 2017 a court in the Netherlands ruled that the regulator's ban on price discrimination violates the EU's 2016 net neutrality regulation. The court found that while T-Mobile's zero rating did violate Dutch law, the ban on price discrimination does not apply as the EU's net neutrality regulation should take precedent. The ACM has 6 weeks to decide whether to appeal the decision. 

Background

The case came about after the Dutch Authority for Consumers and Markets (ACM) ordered T-Mobile to suspend its data-free music offer in December 2016 which provides access to music streaming services, while not charging the subscriber for the data (a practice known as zero rating). The ACM said the practice was in violation of Dutch law and suggested that if it wasn't withdrawn within 20 days, T-Mobile would be fined €50,000 per day (up to a maximum of €500,000) for as long as the offer remained available.  

Since 2012, the Netherlands has had strict net neutrality legislation in place. Along with Slovenia, they have been the only two countries within the EU to go so far as putting in place legislation. Most other Member States took a hands-off approach and waited for the EU-wide rules. During the drafting of the EU regulation, the Dutch government voted consistently against the adoption of the regulation given that it would result in a more relaxed approach.

Zero rating under the EU regulation

The court made it clear that that the 2016 EU provisions on net neutrality "without a doubt" do not include a categorical ban on price discrimination. Instead, national regulators are supposed to decide on a case-by-case basis whether such offers are good or bad for the market in question, making use of guidelines prepared by BEREC. Specifically, national regulators are expected to consider, among other things:

  • Whether the commercial practice is trying to circumvent the general aim of the regulation
  • The market position of the ISP and content providers involved
  • Whether the range of content and applications on offer is in any way being reduced
  • The scale of the practice and availability of alternative offers

It remains to be seen whether the ACM will go back and consider T-Mobile's practice under the EU regulation and using the BEREC guidelines. Nevertheless, given the wide-scale use of zero rating across Europe and the benefits it brings to operators, content providers and consumers, it's expected that most national regulators will continue to take a pragmatic stance. 

© 2017 Matthew Howett. Anyone is free to republish and/or quote this content without prior consent. Please attribute the relevant author as the source.