Gmail is a telecommunications service provider within the meaning of the German Telecommunications Act
In its judgment of 11 November 2015, the Administrative Court (Verwaltungsgericht) of Cologne decided that, as provider of the email service Gmail, Google Inc. is subject to the notification duty set forth in Sec. 6(1) of the German Telecommunications Act (Telekommunikationsgesetz – “TKG”) because the service offered is to be deemed a telecommunications service (Sec. 3 No. 24 TKG).
The judgment thereby gives the first answer to the so far unanswered and highly disputed question of whether, in addition to the traditional telecommunications service providers, providers of so-called over-the-top services (OTT) such as email transmission service providers or instant messaging or VoIP service providers are also subject to the duties set out in the TKG. The timing of the judgement can be deemed to be critical since the questions of how to classify or regulate OTT services plays an important role in the current consultation launched by the European Commission to revise the legal framework for telecommunications.
After earlier informal requests, the German Federal Network Agency (Bundesnetzagentur) issued a formal notice to Google Inc. in July 2012, requesting it to meet its notification duty under the TKG. In the course of objection proceedings, the Agency had also granted the European Commission the opportunity to comment. In response, the Commission took the position (in a legally non-binding way) in February 2014 that the OTT services are not to be deemed electronic communications services within the meaning of the European legislative framework (Art. 2 c) of the Framework Directive) since they lacked the required control over the signal transmission. The Federal Network Agency nevertheless disregarded the objection raised by Google Inc. As a result, Google Inc. filed an action in early 2015 which was now dismissed by the Administrative Court of Cologne.
The positions of the parties
Google Inc. had argued that Gmail was not a telecommunications service since the service provided by Google did not primarily consist in signal transmission as required by the TKG. Google Inc. explained that the use of the open Internet as transmission route was characteristic for a service such as Gmail and that Google obviously had no control over the paths taken by the transmitted data packages via IP protocols before reaching their recipient. The Commission’s statement showed, according to Google Inc., that a classification as a telecommunications service provider would conflict with the assessments of the European Framework Directive. The Federal Network Agency’s step was also said to be mistimed, the Agency apparently wanted to anticipate the political process.
The Federal Network Agency replied that – even technically speaking (according to the OSI layers model) – the Google Inc. servers were providing transmission services. Google Inc. was therefore said to have its own transmission technology and to have at least partial control over signal transmission. The Commission’s non-binding statement was also said to be outdated since the European Court of Justice had made it clear in a judgment pronounced shortly afterwards, on 30 April 2014 (C-475/12), that the classification as electronic communications service provider does not require responsibility for the transmission infrastructure in terms of civil law. Finally, the Federal Network Agency argued that the objectives of the TKG had to be taken into account in the assessment of this issue. The Agency said that it was not interested in regulating the entire internet. However, providers of services such as Gmail or other OTT services should be required to satisfy the same requirements with regard to data protection, customer protection and security as traditional telecommunications providers.
In the end, the Court followed the view of the Federal Network Agency. However, the Court stated that the purely technical view was not decisive. The term telecommunications service in the TKG was rather open to a view based on a functional assessment. The Court allowed a “leapfrog” appeal (Sprungrevision) to the German Federal Administrative Court (Bundesverwaltungsgericht) to pave the way for a rapid clarification by the highest court.
If the higher instance courts uphold the legal opinion of the Administrative Court of Cologne, there will be far-reaching consequences for all OTT service providers and for the regulatory practice in Germany because the OTT service providers would likewise have to comply with the duties specified by the TKG then, with their compliance being subject to the supervision of the Federal Network Agency.
Any questions? Please contact: Julian von Lucius
Practice Group: Telecommunications