Wrong recipient: Million-euro fine against Telegram fails before district court

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The Bonn District Court has overturned two penalty notices against the operators of the messenger Telegram for violating the Network Enforcement Act. The reason is that they were issued against the wrong company.

In October 2022, the Federal Office of Justice (BfJ) issued two penalty notices totaling 5.125 million euros against Telegram FZ-LLC. The reason: According to the supervisory authority, Telegram did not comply with the regulations of the then-applicable, highly controversial Network Enforcement Act (NetzDG).

Two NetzDG Proceedings

Among other things, the authority, which is otherwise responsible for certificates of good conduct and the collective litigation register, accused Telegram of failing to provide a reporting mechanism for allegedly illegal content, despite being obliged to do so (File No. 653 OWi 24/23). In addition, Telegram had not appointed a legal representative in Germany (File No. 652 OWi 27/23).

The problem with this: Without a legal representative to accept official mail for Telegram, the authority could not directly contact the company. The BfJ even attempted to serve documents via diplomatic mail to the alleged company headquarters in the United Arab Emirates.

Ultimately, the BfJ, which is part of the Federal Ministry of Justice, used the option of "public service" and announced in the Federal Gazette the imposition of the fines. A law firm commissioned by Telegram then came forward, and the public prosecutor's office submitted the BfJ's notices to the Bonn District Court for a decision.

Wrong Addressee?

The court has now overturned the notices. The fine proceedings failed on a more fundamental question: Who actually operates Telegram? In app stores, Telegram FZ-LLC appears as the provider. However, according to the court, what is decisive is who exercises actual or legal control ("functional dominion") over the service.

In the court proceedings, it emerged that another company would have been the correct addressee. This is because, according to the findings, the technical infrastructure, user management, and administration of the service are "with overwhelming probability carried out by Telegram Messenger Inc.," according to a court press release.

The supervisory authority for the NetzDG, which has since been largely dismantled and displaced by the EU's Digital Services Act (DSA), should have looked at the service's privacy policy for this, the district judge noted. Therefore, the district court did not even have to clarify whether Telegram would be affected by the NetzDG at all.

That would have been interesting: The law firm argued, among other things, that Telegram is not a social media platform within the meaning of the law, but a messenger. Telegram is also pursuing this argument with the European DSA.

EU Commission Has an Address

That probably won't convince the Commission. Just on Monday, it classified competitor Whatsapp as a platform-like service because, like Telegram, it has a function that allows messages to be sent to many users. At least the Commission doesn't have a problem: it has an address for Telegram.

The Federal Office of Justice can appeal the decision to the Cologne Regional Court, so the decision is not yet legally binding. It had not yet been served on the BfJ by Wednesday afternoon. The public prosecutor's office in Bonn will decide whether to continue the proceedings.

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