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Clarity Given by EU Court of Justice on its Interpretation of an ‘Electronic Communications Service’

AUTHOR(S): Kate McKenna
PRACTICE AREA GROUP: Telecommunications
DATE: 26.06.2019

Introduction

The Court of Justice of the European Union (CJEU) recently delivered two long-awaited judgments on whether services provided by online-based communications services are subject to the telecommunications framework and the regulatory obligations associated under it. The Court found that Microsoft’s SkypeOut feature can be considered an electronic communications service (“ECS”), while Google’s Gmail service cannot. The reasoning provided by the Court’s decisions provides some clarification of the expanding interpretation of an ECS, while also indicating where it may place its limit on this definition.

Definition of an Electronic Communications Service

Over the past number of years, the EU has come under increased pressure to expand its oversight of online-based communications services and subject these service providers to the same regulation as traditional telecoms providers.

This regulatory gap has emerged as a bone of contention between traditional telecoms providers, which are obliged to comply with onerous requirements such as notification obligations and consumer protection rules, and online-based communications services which are perceived as benefiting from an advantage by avoiding these requirements.[1]

The EU has adopted a revised telecommunications framework to address this concern, the  Electronic Communications Code[2] and it is likely that both the Gmail and Skype services will fall within the remit of the EECC as ‘interpersonal communications services’.

Skype Ruling

The CJEU ruled in Skype Communications Sàrl v IBPT,[3]  that SkypeOut should be considered an ECS. This decision of the Court has potential for far-reaching implications affecting a range online service providers, whereby paid-for communication systems may be subjected to more onerous regulations.

The Court considered that SkypeOut provides an ECS, in line with services offered by traditional telecoms operators, on the grounds that SkypeOut allows users to call a fixed or mobile number using Voice over Internet Protocol services, for which it receives remuneration. The reasoning of the Court focused on the fact that the SkypeOut service involves the conveyance of signals on electronic communications networks (immaterial if Skype owns the infrastructure over which those signals are conveyed).

The Court also considered that while calls are placed using an internet connection in the first instance, they also require in the second instance, the use of telecommunications service providers on the public switched telephone network (PSTN). Futhermore, the Court noted that the transmission of calls occurs pursuant to agreement between Skype and the telecommunications service providers, to which it pays remuneration.

Google Ruling

The question of whether Google’s Gmail service could be considered an ECS was referred for a preliminary ruling of the CJEU by a German court in the case of Google v Germany.[4] The Court focused its analysis on whether the service provided by Google consists “wholly or mainly of the conveyance of signals”.

The Court found that while Google’s Gmail service does involve the conveyance of signals by sending and receiving intellectual property packets on the open internet, it remains that this service does not consist “wholly or mainly” of the conveyance of such signals.

The Court considered that the mere fact that Google participated in the sending and receipt of messages whether through email addresses or by splitting those messages into data packets and uploading them on the open internet, cannot technically be regarded as consisting ‘wholly or mainly in the conveyance of signals on electronic communications networks’.

The Court concluded by ruling that it is the responsibility of the referring Member State to consider whether there are other facts establishing Google’s responsibility for the conveyance of signals within the scope of the Gmail service. On the grounds that Gmail could not be considered as providing a service consisting “mainly or wholly” in the conveyance of signals, on the basis of the facts provided by the referring court, the CJEU declined to answer the questions of the referring court as they pertained to remuneration.

Conclusions

These two rulings of the Court offer some indication on the likely future developments in this area of the law. In its ruling in the Skype case, the Court of Justice formally expanded the scope of an ECS to VOIP providers. This is in line with the approach taken by The Body of European Regulators for Electronic Communications (BEREC) which has outlined previously VOIP services, which permit inward and/or outward connections to the PSTN should be considered ECS and subject to regulation. The Irish Commission for Communications Regulation has previously adopted the same approach as BEREC.

However, the Court of Justice stopped short of including Gmail within this bracket, seemingly on the grounds that unlike Skype, it was responsible for the mere “initiation” of signal conveyance. Regardless, the EECC is likely to put this issue to rest once and for all as both the Gmail and Skype services will likely fall within the remit of the EECC as ‘interpersonal communications services’.

 

[1]  European Parliament – Regulating electronic communications – A level playing field for telecoms and OTTs? http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/586641/EPRS_BRI%282016%29586641_EN.pdf

[2]. Council Directive 2018/1972 establishing the European Electronic Communications Code [2018] L 321/32.

[3]. Case C-142/18, Skype Communications Sàrl v IBPT Judgment of the Court 5th June 2019.

[4]. Case C-193/18 Google v Germany Judgment of the Court 13th June 2019.   

This article was co-authored by EU Competition partner Kate McKenna and EU Competition associate Simon Shinkwin

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