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Digital Business Lawyer

Threeís controversial move to offer network-wide adblocking

This article was originally published in Volume: 18 Issue: 3 (March 2016)

Mobile operator Three has signed a deal with Israeli provider Shine to offer adblocking services at network level in the UK and Italy initially. This is the same technology that Caribbean carrier Digicel implemented last year, and Three claims it can block 95% of banner and pop-up ads.

Unlike say AdBlock Plus, a browser extension sitting on the user’s device, Shine’s technology operates at mobile network level. It uses deep-packet inspection to identify and remove mobile ads from the data-stream before they hit the user’s device - and before the mobile carrier transmits them. It does not currently block so-called ‘native advertising,’ sponsored articles, pre-roll video ads or in-feed promotions on social networks.

Three says its goal is not to “eliminate mobile advertising,” but says it has a number of reasons for deploying adblocking capability. First, it says customers “should not pay data charges to receive adverts”: Three says these should be borne by the advertiser. Secondly, it claims that mobile ads can be used to “extract and exploit data about customers without their knowledge or consent.” Thirdly, it says customers should be entitled to get “advertising that is relevant and interesting to them. 

Few details have been released about exactly how Three will use Shine’s technology to deliver on its commitment to a “better, more targeted […] mobile ad experience.” Given what Three has already said, it seems likely the operator may look to advertisers to pay data transmission costs associated with their ads, as a condition of not being blocked. Some other filtering may also be applied. It is not yet clear whether the functionality will be offered to Three customers free of charge.

According to reports, the European roll-out will - in contrast to Digicel’s ‘opt-out’ deployment - be on a consumer opt-in basis, meaning Three customers will have to choose actively to switch the blocker on. Nevertheless, the deal looks set to make adblocking at source available for Three’s 8.8 million UK customers. And if Three’s proposed merger with O2 goes ahead then the reach will be even greater - an estimated 23 million customers. Further, Three envisages a “rapid roll-out” to the other jurisdictions in which it operates, and Shine says it is talking with other carriers in Europe and the US. Accordingly the commercial impact on the ecosystem of the ad-funded internet could potentially be very significant indeed.

Many advertisers and publishers have already been looking at technical and/or legal measures to fight adblockers generally. 

Adblocker blocking

Some have sought to fight fire with fire, using technical measures to detect adblocking software and take steps to avoid or reduce its impact. Perhaps inevitably this has led to a form of ‘arms race,’ with each side trying to stay one step ahead of the other with increasing levels of sophisticated coding.

Adblocker detection

Some publishers are using technical means to detect when ads have been blocked and then trigger particular actions. In some cases, this is a polite informational notice asking the user to think about the consequences of using an adblocker. In others, the user is barred from accessing the site’s content, with the publisher relying on site terms that expressly prohibit the use of adblocking software.

Legal action

Previous legal actions brought by major media owners against Eyeo, the company behind AdBlock Plus, have been unsuccessful in the German courts. These were based on unfair competition, copyright and abuse of market dominance laws. However, could there be scope for a different result against Shine/Three under one or more of these headings - potentially in a different court, based on different publisher user terms and with larger market share figures, particularly if and when the Three/O2 merger goes through?

There should also be scope in some cases - under English law at least - for an action under the tort of procuring or inducing a breach of contract. This would apply on the basis that the person(s) blocking ads had intentionally induced or procured users to breach the site terms of publishers’ websites - in particular terms prohibiting the use of adblockers - without reasonable justification and with the result that the publishers suffer economic loss.

Additionally, with this kind of network-level blocking, an action may be available under the net neutrality provisions in European Commission Regulation 2015/2120 once these come into force. Under Article 3, internet access providers have to treat all internet traffic equally and cannot discriminate, restrict or interfere other than for the purposes of reasonable traffic management. In particular, blocking of specific content or categories of content is only permissible in three narrowly defined cases, none of which appears to apply to the kind of use envisaged by Three/Shine.

Change to business model

Of course, the other option for online businesses may simply be to change their revenue model. As the Internet Advertising Bureau points out, adblocking could ultimately mean consumers “have to pay for content they currently get for free.”

 

Nick Johnson Partner

Osborne Clarke, London

nick.johnson@osborneclarke.com




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