ECJ Strengthens Consumer Rights: Free Termination Right When Zero-Rating Ends

The European Court of Justice (ECJ) announced a ruling on Thursday that strengthens the position of internet and mobile customers in the EU. It concerns whether users have a special right of termination if providers are forced to change their contracts unilaterally to adapt them to current case law on “zero-rating” for streaming services. The judges in Luxembourg clarified that such a contract change does not fall under the legal exceptions that would preclude a free termination.

This means providers must allow customers to exit as soon as they adjust the terms for data usage. This applies even if they do so under pressure from national regulatory authorities.

The background to the proceedings is a long-standing dispute over zero-rating options. In these tariffs, data traffic for certain applications, such as music streaming or social media, is not counted towards the monthly inclusive volume. As early as 2020 and 2021, the ECJ had ruled that such practices violate net neutrality and that EU law opposes them. Consequently, national authorities such as the Hungarian media authority, in the case C-514/24 currently decided by the ECJ concerning Magyar Telekom, called on providers to correct existing contracts.

Hungarian case also relevant for Germany

Magyar argued that customers would not be entitled to free termination in this case. The company argued that the contract adjustment was directly required by EU law or at least by the administrative decisions based on it. In line with EU legislation, end users can normally terminate contracts free of charge in the event of unilateral contract changes. An exception applies if the adjustment is “directly prescribed by Union law or national law.”

The ECJ rejected this argument. It emphasized that exceptions to consumer protection must be interpreted narrowly. A ruling by the Court does not change the law itself but merely declares declaratorily how an existing provision is to be understood since its entry into force. Neither the ECJ's rulings nor the guidelines of the Body of European Regulators for Electronic Communications (BEREC) based on them, nor the decisions of national authorities, therefore constitute an immediate normative change that could undermine users' right of termination.

The ruling is also relevant for the German market. In Germany, tariffs such as Telekom's StreamOn or Vodafone Pass have been the subject of legal disputes for years. Following the previous ECJ rulings, the Federal Network Agency prohibited the marketing and later also the use of these options, affecting millions of contracts.

Clarity for Consumers

Since providers were forced to delete or adjust these core tariff components, the current ruling from Luxembourg now creates more clarity for consumers: If services that were crucial for concluding the contract – such as unlimited use of certain apps – are deleted, providers cannot hide behind the administrative order to keep customers in their contracts.

The ruling thus cements the principle that the entrepreneurial risk of unlawful tariff design must not be passed on to end customers. For the industry, this means that a wave of terminations can be expected with future adjustments to net neutrality, provided that the replacement offers are not attractive to users.

(vbr)