Advertising blockers – the transition from television to internet advertising blockers

In the field of electronics, a business model has developed in recent years whereby users can filter out and block advertising using a so-called "ad blocker". At the end of the nineties, the possibility of ad blocking for television was under discussion but now the focus has shifted to ad blocking on the internet.

Starting point: The television ad blocking decision of the Federal Court of Justice (BGH)

The subject of the BGH decision of 2004 was a cut-in unit sold under the name "Fernseh-Fee" which had the function of blocking advertising. By way of this ad-blocking function, users could programme the cut-in unit in such a way that advertising blocks were blended into the ongoing channels. A command signal was sent out so that during the period of the advertising block in the selected channel, the television would be switched to an advertising-free channel and then switched back again to the original channel at the end of the advertising block. A television broadcasting channel which was solely dependent upon income from commercial advertising considered this to be unfair commercial practice. The BGH denied the existence of a breach of unfair competition or copyright law, taking the view that there was no anticompetitive restraint within the meaning of Sec. 1 German Law against Unfair Competition (UWG). The court held that there was no product-related restraint which had a direct impact on the competitor’s product such as destruction or damage, because the use of the ad blocker function was left up to the respective viewer. Ultimately it was for the viewer to decide whether or not to use the ad blocker function. BGH refused to accept that the claimant was prejudiced. Furthermore, no breach of copyright law was found to exist due to the lack of interference with a copyright exploitation right.

Current discussion: internet ad blockers and their legal evaluation

With the rise of the internet, the presence of advertising in this area has also increased. Using advertising on the internet, companies can accurately target potential buyers for their advertised products and services. A distinction must be made here between "obtrusive" advertising and "acceptable" advertising. "Obtrusive" advertising is advertising which is pushed to the foreground and which demands the attention of the internet user, whilst "acceptable" advertising is fitted into the context of the page and is perceived by the consumer as "still acceptable". This distinction is the pre-requisite for the business model which forms the basis of the computer software AdBlockPlus. This year alone, the product was the subject of four decisions from the German Courts (See District Court Munich I, decision dated 27.05.2015, case no.: 37 O 11673/14; District Court Munich I, decision dated 27.05.2015, case no.: 37 O 11843/14; District Court Hamburg, decision dated 21.04.2015, Az.:416 HKO 159/14 and one unpublished decision of the District Court Cologne). Website operators can contractually undertake to comply with certain criteria for 'acceptable' advertising so that their websites can be activated though so-called 'White-Lists'. This has the result that internet users, in spite of the installation of an ad blocker, can still see 'low-key' advertising on the activated websites. The operators of the AdBlockPlus computer software demand payment are dependent on sales for the white listing.

The German Courts consider advertising blockers in the AdBlockPlus format – so far – to be basically permissible. An advertising blocker does not generally form the basis of a legal infringement under unfair competition law, copyright law or anti-trust law. Three of the four District Court decisions have been published and on the basis of these, a uniformity of approach in the rulings can be recognised whereby the decisions of the Lower Courts are geared to the decision of the BGH in relation to the television advertising blocker. A key difference from the BGH decision is that the internet ad blocker is available on the internet as a free download.

Whilst the District Court of Munich I held that the claim failed due to lack of a necessary competitive relationship, the District Court of Hamburg accepted the existence of such a relationship between the parties but rejected the claim due to the absence of a targeted restraint within the meaning of Sec. 4 no. 10 UWG. The necessary pre-requirement for a claim under Sec. 4 no. 10 UWG is a so-called 'targeted restraint'. Although the District Court of Munich I already rejected the claim for the reason stated above, it did state that a targeted restraint did not exist which means that both courts considered the question of the existence of a targeted restraint. The District Court of Munich I commented in relation to this – as in the BGH decision cited above – that the blocking of advertising was solely attributable to the autonomous and independent decision of the internet user. The user alone can decide whether he wishes to dispense with an advertising blocker and see all of the content, or whether he wants to use AdBlockPlus as a default setting with the pre-set whitelist or a different version of AdBlockPlus, or to use a different advertising block to block out any advertising. The District Court of Hamburg also took up this reasoning and likewise emphasised that a targeted restraint within the meaning of Sec. 4 no. 10 UWG could not exist because ad blocking did not prejudice the core business of the operator of a website (in this case the procurement of journalistic content). The opposite was in fact the case: Moreover the use of such an advertising blocker did not detract from the essential content of the website.

In the same way, the courts held that there was no breach of copyright law or anti-trust law. There was no act of use on the part of the internet user which was contrary to copyright law: the simple acceptance of the offer of an ad blocker which was made available free of charge on the internet – irrespective of the agreement of the website operator to the use of such an ad blocker – did not constitute an act of use under copyright law. A breach of anti-trust law could not be found either due to the lack of abuse of a market-dominant position. In spite of the operation of ad blockers it was still possible for website operators to reach a sufficient number of internet users who viewed the website without ad blockers and, therefore, with advertising.

Conclusion

It is to be expected that advertising blocks and the question of their permissibility will be further considered in future by the higher German Courts. Until now, every legal dispute – albeit exclusively before the District Courts – has been decided in favour of AdBlockPlus and to the detriment of the online advertising industry.

If, however, a company introduces an anti-advertising block in the form of ad blocker recognition software so that the blocking of advertising on its website is prevented, this may not be circumvented by the ad blocker. This was the recent decision of the District Court of Hamburg in the context of preliminary proceedings dated 22 October 2015 (District Hamburg, decision dated 22.10.2015, case no.: 308 O 375/15). The Court based its decision on Sec. 95 a para. 3 German Copyright Act, because the ad blocker recognition software on the website which prevented the blocking of advertising was a protective measure within the meaning of this provision and any act which supports or facilitates circumvention of such a measure is prohibited under the Copyright Act. It remains to be seen how the Upper Courts will decide on this and in other proceedings.

If you have any questions on this article please contact us.

Regulatory

Privacy & Cookie Policy

Terms of Use

© 2021 Taylor Wessing LLP