Antik v. UPC - strategic litigation case about net neutrality in Slovakia

In February 2014, EISi, acting as a consumer protection association, intervened in the proceedings between Antik Telecom s.r.o and UPC Broadband Slovakia s.r.o. A short summary of the case follows.

UPC and Antik are two competing internet access providers in Slovakia. They are also both vertically integrated in the TV retransmission market. Whereas UPC provides cable TV retransmission, Antik provides Internet Protocol television (IPTV). Therefore, the case is about two vertically integrated competitors who compete not only in the Internet access, but also in the TV retransmission market. Neither of them has a dominant position.

In March 2013, UPC blocked the IPTV service provided by Antik by blocking its public IP address.This meant that customers who used Internet access from UPC were technically precluded from using IPTV service of Antik (set-top boxes wouldn't work for them). UPC carried out this block most likely in order to disadvantage the competitor's IPTV retransmission and to provide an advantage for its own cable TV retransmission service.

After UPC's tactics became public, many feared that this practice might be followed by other ISPs pursuing their commercial interests, thus leading to totally balkanized Internet access in Slovakia. For this reason, EISi issued an opinion outlining applicable existing laws to net neutrality in Slovakia. The opinion stresses that despite the non-existence of explicit net neutrality principles in Slovak telecommunication laws, many instances of net neutrality breach can be actionable under existing antitrust, unfair competition and consumer laws. In our opinion, UPC's practice very likely breaches both unfair competition and consumer laws (UPC is not a dominant provider of Internet access and it blocked internet access unilaterly).

In July 2013, Antik requested a preliminary injunction against UPC based on unfair competition laws. In October of the same year, the District Court in Bratislava I. (8 Ncb/90/2013-321) granted the temporary injunction against UPC prohibiting it from blocking or degrading Antik's IPTV services on UPC's infrastructure. The court found the plaintiff's arguments convincing in ex parte proceedings. In the meantime, UPC removed the block but announced its intention to continue the legal battle, as it considered it to be of „great importance for the industry“. UPC first filed an appeal against the preliminary injunction but then withdrew it, claiming it would rather concentrate on the main proceedings.

Soon after, in November 2013, Antik filed a lawsuit against UPC. The action was vaguely based on EISi's opinion, arguing that the blocking of a competitor ́s service (IPTV) on UPC's infrastructure in a different market (unlimited Internet access) leads to unfair commercial benefit for UPC in the TV retransmission market, because it leverages its consumer base against the competing TV retransmission providers (cutting part of the market for itself by default). If this was allowed, then any vertically integrated internet access provider could block out any competitor in a parallel market requiring Internet connectivity for his own consumer base.

In February 2014, EISi, acting as a consumer protection association, intervened in the proceedings. Our submission claimed that UPC breached the local transposition of the Unfair Commercial Practices Directive (2005/29/EC):

  • by misleadingly labeling and selling the service as "flat rate" Internet access, when the service in fact does not provide general access to Internet (transparency argument), and
  • by materially distorting the economic behaviour of the consumer, because the consumer-base of UPC is technically cut from different competing services on unrelated market, thus leading it artificially to decide for UPC TV retransmission (discrimination argument).

In our submission, we ask the Slovak court to make a preliminary reference to the Court of Justice of the European Union according to Art. 267 of TFEU in a following wording:

  1. Is a technical limitation of the free choice of the consumer carried out by means of precluding his access to the internet service of a competitor within a service of unlimited internet access an agressive commercial practice within the meaning of Art. 8 of the Directive 2005/29/ES on unfair commercial praciticies?
  2. If the answer to the first question is negative, is it possible to regard such a behavior as unfair commercial practice within the meaning of Art. 5(2) of the Directive 2005/29/ES on unfair commercial praciticies?

In May 2014, the regional court Bratislava I refused to admit us into the proceedings. We lodged an appeal against this decision and in March 2015 the Higher Regional Court in Bratislava confirmed that we have the right to be a admitted as a party into the proceedings. However the defendant appealed against this decision and the case is now pending before the Slovak Supreme Court. 

 

EISI logotyp

 

 

European Information Society Institute je mimovládná organizácia, ktorá sa zaoberá prienikom technológií, práva a informačnej spoločnosti. EISi pôsobí aj ako neuniverzitné centrum pre výskum internetového práva a práva duševného vlastníctva.