Germany: German Court: Google's Gmail Is A Regulated Telecoms Service

For the past five years, Google and the German telecommunications regulator, the Federal Network Agency (Bundesnetzagentur – BNetzA), have been arguing whether Google’s email service Gmail qualifies as a telecommunications services as defined by the German Telecommunications Act (Telekommunikationsgesetz – TKG). BNetzA eventually ordered Google to notify the service (i.e., it considered it to be regulated), and now, the Administrative Court of Cologne upheld this view in a judgment of November 11, 2015, which was published only last week.

The judgment is the first time a German court dealt with the legal qualification of over-the-top (OTT) communications services. Although the court’s reasoning is disputable, and Google has the option to appeal the judgment up to the Federal Administrative Court, the decision nevertheless comes at a time when OTT services are generally attracting increased attention from regulators and policy makers, and where “traditional” telcos are lobbying hard in favor of a “level playing field” regulation for the likes of Skype, WhatsApp, or Gmail. And in particular, the case demonstrates that despite an EU-wide harmonization of telecommunications law, Member State law still allows for deviating classifications of specific services as being regulated or not. This requires providers of pan-European or even global OTT services to carefully evaluate the applicable regulatory framework not just on the EU level, but, in fact, Member State by Member State.

1. What did the German court decide?

In 2010, BNetzA first approached Google regarding the notification requirement set forth in Sec. 6 TKG, because BNetzA considered Gmail to be a telecommunications service within the meaning of Sec. 3 No. 24 TKG. In 2012, after two years of exchanging views on the regulatory qualification of Gmail, BNetzA then issued this request by way of a formal decision. Google filed an objection against BNetzA’s order which was rejected in late 2014. In early 2015, Google then filed an action against BNetzA with the Administrative Court of Cologne. The court thus had to decide whether BNetzA’s request for a notification was justified, i.e., whether Gmail does indeed qualify as a regulated telecommunications service within the meaning of the TKG. In doing so, the court upheld BNetzA’s position with the following reasoning:

  • Pursuant to the statutory definition in Sec. 3, No. 24 TKG, a “telecommunications service” is defined as a service that is (a) usually provided against remuneration and (b) mainly consists in the conveyance of signals over telecommunications networks. In the court’s opinion, Gmail meets both criteria, and thus triggers the notification requirement for commercial telecommunications services as stipulated in Sec. 6 TKG.
  • On the remuneration criterion, the court held that because Google provides Gmail as a “commercial” service, the service must be considered to be provided “against numeration”. This is not very convincing. In fact, it mixes up two separate issues: (Only) whether a service is provided against remuneration is crucial for the qualification as a regulated service, whereas the “commercial” provision of a telecommunications service (i.e., a service which was already categorized as being regulated because it is provided against numeration) then only triggers certain specific regulatory obligations (such as the notification requirement). However, the court only deals with the second question of Gmail being a “commercial” service, but not at all with the actual remuneration criterion.
  • On the second element of the statutory definition, the conveyance of signals over telecommunications networks, the court took a functional approach:
    • From a user perspective, the only purpose for using Gmail was to convey messages from sender to recipient. From Google’s perspective (in the view of the court), the service must thus provide this function in order to meet the user’s demand.
    • The court also found its understanding to be in line with the legislator’s intentions: The notification obligation shall allow BNetzA to monitor commercially provided telecommunications services in order to make sure that all requirements regarding consumer and data protection as well as public safety are met.
    • Since email and other OTT communications services increasingly replace conventional telecommunications services, the court further referred to the regulatory objectives of ensuring fair competition and safeguarding technological neutrality (Sec. 1 TKG) in order to justify its qualification of Gmail as a regulated service.
    • Finally, the court found that even though Google itself did not provide the actual signal transmission between the servers that are involved in email delivery, this transmission via the open Internet must still be attributed to Google because the transmission was triggered by Gmail users hitting the “send” button and facilitated by Google’s email servers. In this respect, the court referred to the CJEU judgment of April 30, 2014 in case C-475/12, where the European court had ruled that the ownership of the infrastructure used to transmit signals was irrelevant for the classification of a service as being regulated, as long as the provider of that service is responsible for this transmission vis-à-vis the end users.

2. Is this already a final verdict?

No. Google can appeal the decision to the Higher Administrative Court and/or the Federal Administrative Court, so it may take another few years for a final verdict to come down in this matter. And in fact, several aspects of the court’s reasoning seem to provide a sufficient basis for an appeal:

  • BNetzA had classified Gmail as a regulated service against a contrary assessment by the European Commission, and the Administrative Court held onto that classification: BNetzA had sought input from the European Commission, asking for the categorization of email services similar to Gmail within the European regulatory framework in 2014 and before rejecting Google’s objection against BNetzA’s initial decision. The Commission found that the services described by BNetzA could not be qualified as regulated “electronic communications services” (ECS) as defined in the EU Framework Directive (Directive 2002/21/EC, as amended). Accordingly, the German court now deviated from the harmonized ECS definition, and the case might thus well go up to the CJEU during the appeals proceedings, in order to clarify how the German definition of a “telecommunications service” relates to the EU regulatory framework.
  • But even in a purely German law context, the court’s reasoning is weak, especially when it comes to the issue of a “remunerated” as opposed to a “commercial” service (see above). Beyond the fact that the court simply confused these two statutory criteria, it raises the further—and likely more interesting—question whether advertising-financed services and/or services that collect certain user data can be seen as being provided “against remuneration”.
  • Finally, the court’s interpretation of the requirement of a “conveyance of signals” is yet completely unprecedented with respect to email (or other OTT communications) services. In any event, the court’s reasoning seems to be somewhat circular in arguing with a need to efficiently monitor all telecommunications services once they have been notified, in order to justify the notification requirement itself. Many of the court’s arguments in favor of a functional interpretation of the statutory definition also seem to be detached from the actually rather technical term “conveyance of signals”.

3. What would it mean if the court’s view prevailed?

The Gmail decision is important to OTT communications services as a whole, i.e., not just to the provision of web-based email services, but also for providing VoIP, messaging, conferencing, or unified communications solutions over the Internet. Because if the view of the German court prevails, OTT services could be subject to a wide range of regulatory obligations. And this would generally also apply to services where the provider is not even based in Germany, as long as the service addresses the German market. Just to name a few of these obligations:

  • Notification requirement with BNetzA (ex post after market launch);
  • Number portability / support of customer relocation;
  • Emergency calling;
  • Customer protection provisions, e.g., special transparency and information rights;
  • Public security provisions, e.g., access to customer data for law enforcement agencies; and
  • IT security requirements, e.g., security concept and breach notification obligations.

Many of these obligations, however, are clearly tailored towards traditional telecommunications services and would be hard to comply with for providers of Internet communications services like Gmail. But once a particular service was qualified as a telecommunications service, these obligations apply nonetheless, and OTT providers are facing a risk of regulatory action such as monetary fines and/or an order to stop providing the service to German customers.

4. What else is happening in the OTT policy discussion?

OTT providers should closely follow the current national and EU-wide policy initiatives to determine the suitable regulatory framework for OTT services. For example, this week the European Commission closed a consultation where it had asked for industry input on whether and how to integrate such new services into the existing telecoms regime. On a national level, BNetzA had also facilitated a public discussion on this topic, e.g., by holding an international regulatory conference this October. As a starting point, these discussions deal with the categorization of OTT services within the existing definitions of a “telecommunications service” (or, respectively, an ECS). This is where the Cologne court’s decision now made an impact of its own. Furthermore, however, the even more important part of the discussion will then be on the merits of a potential OTT regulation, i.e., which elements of existing telecoms regulation can (and shall) be applied to OTT services, and which parts cannot—or, in other words: Will the telcos’ call for “level playing field” regulation be heard?

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions