This is a groundbreaking verdict, since Dutch law bans companies such as T-Mobile to provide zero-rating services since it leads to unfair competition. The Dutch Consumer and Market Authority (ACM) tried to block T-Mobile from offering zero-rated music streaming, asking the court to impose fines of 50,000 euros (around $52,000) per day up to a maximum of 500,000 euros (or around $521,000) if T-Mobile would not stop its free service.
To refresh your memory, zero-rating is a well-known practice among mobile network operators (MNO), mobile virtual network operators (MVNO), and Internet service providers (ISP), where they don’t charge end customers for certain services (in this case: music streaming). The catch? Zero-rating offerings are part of a limited or metered data plan to get ahead of the competition. That’s why the ACM objected; offering free music streaming would give T-Mobile an unfair advantage.
ACM argues that zero-rating offerings might have a negative impact on fair competition between online services. It could services such as Spotify and YouTube (that use more data) at a disadvantage. Zero-rating could therefore impact the way consumers use the Internet, which would violate the net neutrality principle.
ACM board member Henk Don argued that “Dutch law is clear about zero-rating: it is not allowed. That is why ACM is taking action … There is no such thing as free data: it causes other services to become more expensive”.
The Dutch court that zero-rating is indeed forbidden under the Dutch Telecommunication Act, but that this Dutch prohibition does not apply, since the Netherlands under the European Network Neutralization Regulation was not authorized to supersede. All efforts to include the Dutch regulation regarding zero-rating have failed.
However, the court does point out that the way that T-Mobile offers its Data Free Music service could still be violating the Net Neutrality Regulation, but since ACM did not raise this argument (since it assumed that zero-rating was per se prohibited), the court did not look into this aspect. For now, T-Mobile can continue to provide its free music streaming service.
ACM is not giving up; it started a new investigation of T-Mobile zero-rated music streaming offer. This time, it will not assess if the offer base complies with Dutch net neutrality legislation, but if it violates the EU's net neutrality rules.
Stay tuned!
(Second image courtesy of T-Mobile)
