Europe's Top Court Says Net Neutrality Rules Bar 'Zero Rating'

The European Union's top court has handed down its first decision on the bloc's net neutrality rules -- interpreting the law as precluding the use of commercial 'zero rating' by Internet services providers. TechCrunch reports: 'Zero rating' refers to the practice of ISPs offering certain apps/services 'tariff free' by excluding their data consumption. It's controversial because it can have the effect of penalizing and/or blocking the use of non-zero-rated apps/services, which may be inaccessible while the zero rated apps/services are not -- which in turn undermines the principal of net neutrality with its promise of fair competition via an equal and level playing field for all things digital. The pan-EU net neutrality regulation came into force in 2016 amid much controversy over concerns it would undermine rather than bolster a level playing field online. So the Court of Justice of the EU (CJEU)'s first ruling interpreting the regulation is an important moment for regional digital rights watchers.

A Budapest court hearing two actions against Telenor, related to two of its 'zero rating' packages, made a reference to the CJEU for a preliminary ruling on how to interpret and apply Article 3(1) and (2) of the regulation -- which safeguards a number of rights for end users of Internet access services and prohibits service providers from putting in place agreements or commercial practices limiting the exercise of those rights -- and Article 3(3), which lays down a general obligation of "equal and non-discriminatory treatment of traffic." The court found that 'zero rating' agreements that combine a 'zero tariff' with measures blocking or slowing down traffic linked to the use of 'non-zero tariff' services and applications are indeed liable to limit the exercise of end users' rights within the meaning of the regulation and on a significant part of the market. It also found that no assessment of the effect of measures blocking or slowing down traffic on the exercise of end users' rights is required by the regulation, while measures applied for commercial (rather than technical) reasons must be regarded as automatically incompatible. The full CJEU judgement is available here.

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