EU Council Said Close to Agreement on Net Neutrality, an Issue in Ad-Blocking Debate
EU governments could be close to an agreement with the European Parliament on net neutrality provisions in the telecom single market (connected continent) legislative package, an EU diplomatic source said Wednesday. Net neutrality is one of the two main legal arguments in the debate over advertising blocking by ISPs and mobile operators, Hogan Lovells (Paris) telecom lawyer Winston Maxwell told us. Ad blocking could turn out to be a boon to users and spur a rethink of ads in general, said Roslyn Layton, a fellow at Denmark's Aalborg University Center for Communications, Media and Information Technologies.
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The EU Latvian Presidency's latest compromise text is contained in a leaked May 17 "non-paper" on the net neutrality and mobile roaming provisions of the connected continent measure. Governments now support the "net neutrality principle that all traffic must be treated equally," the diplomatic source told us. The telecom single market discussion overall "seems to be going well," and the "elements are there," the source said. "The presidency is working very hard on this, so if everything goes well, we could still have a deal with the [European Parliament] within the next few weeks."
La Quadrature du Net, however, slammed the Council, saying negotiators removed all references to safeguarding end users' rights and nondiscriminatory treatment of traffic, which should be key principles of the regulation. The document no longer contains a definition of or reference to net neutrality, instead calling for an "open Internet," which won't guarantee transparency or no-discrimination, the group said. The text also deletes language from the European Parliament on specialized services, which was a key measure to ensure fair competition, it said.
French ISP Free in 2013 began pushing ad-blocking software in subscribers' DSL modems that blocked some third-party ads, Maxwell said. When the government criticized the practice, Free deactivated the function, requiring users to activate the blocking, he said. A user-initiated and controlled activity is hard to fault under net neutrality rules, while allowing ISPs to presume what users want begins to look like either a violation of net neutrality or an unfair business practice, he said. The jury is still out whether ad-blocking actually raises net neutrality issues, but the legal arguments against it are net neutrality and unfair competition, he said.
Unfair obstruction of a competitor was the legal ground raised by German media houses Zeit Online and Handelsblatt against Eyeo's AdBlock Plus software, Hogan Lovells (Hamburg) trademark and competition lawyer Anthonia Ghalamkarizadeh wrote April 22 on the firm's blog. The Hamburg District Court, however, said AdBlock Plus isn't unfair competition because it gave users the option to block or select the ad content they wanted to see. Although the software came with some default settings, users could decide whether to install it in the first place and to leave or change the settings, said Ghalamkarizadeh. That negated the argument that Eyeo was willfully obstructing website operators, she wrote. Lawsuits are pending in Cologne and Munich, and the Cologne court "has so far been more critical of Eyeo's market practices," she added.
Historically, U.S. media companies flourished because of advertising, said Layton. Advertisers paid network owners so users could receive content free, she said. Net neutrality seeks to make end users pay the whole cost and to keep advertisers out, opposite the traditional model, she said. Ad blocking is more like the way the media industry used to be funded, with advertisers paying for their content to be placed, Layton said. Ad blocking doesn't breach net neutrality rules because it's what users want, said Layton. It could help solve behavioral targeting and privacy issues, allowing consumers to pay a small amount of money each month to get rid of ads, preventing unwanted data collection, she said.