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New Electronic Communications Act (ZEKom-2) is on its way – what does this mean for Viber, WhatsApp, Zoom and other Internet-based communications services?

Recently (on 28 August 2020), the Ministry of Public Administration published a draft proposal for a new Electronic Communications Act (ZEKom-2), which is intended to replace the current ZEKom-1 and transpose the Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code (EECC) that replaced four directives of the current regulatory framework for electronic communications (the so-called Access Directive, Authorization Directive, Framework Directive and the Universal Service Directive). The deadline for the transposition of the EECC expires on 21 December 2020, whereas the draft proposal for ZEKom-2 will be in public discussion until 15 October 2020.

One of the most important new features introduced by the EECC and the draft proposal for ZEKom-2 is a change in the regime of legal regulation of OTT (over-the-top) services, which I already wrote about some time ago (https://www.jadek-pensa.si/en/facebook-viber-youtube-netflixsoon-subject-to-stricter-regulation/), as well as of some other communications services, such as communications services between machines/devices that are the basis for Internet of Things (machine-to-machine or M2M communications). In order to differentiate regulatory regimes for individual types of services, a new definition of the term “electronic communications services” is envisaged which now includes three independent but potentially overlapping types of services provided via electronic communications networks, namely:

  • internet access service,
  • interpersonal communications service and
  • services consisting wholly or mainly in the conveyance of signals.

The Internet access service is already defined in the Regulation (EU) 2015/2120, namely as a publicly available electronic communications service that provides access to the internet, and thereby connectivity to virtually all end points of the internet, irrespective of the network technology and terminal equipment used.

Services consisting wholly or mainly in the conveyance of signals are e.g. transmission services used for the provision of machine-to-machine (M2M) services and for broadcasting (i.e. services not intended for interactive communication between persons).

From the point of view of OTT communications services, the definition of interpersonal communications services will be particularly relevant. Interpersonal communications services are services that enable interpersonal and interactive exchange of information, and include services such as traditional voice calls between two individuals, as well as all types of e-mail, messaging services and group chat.

Interpersonal communications services include only communication between a limited (finite) number of end users determined by the initiator of the communication. Interactive communication entails that the service allows the recipient of the information to respond. Services that do not meet these characteristics, such as linear broadcasting, video-on-demand, websites, social networks, blogs, or the exchange of information between devices (M2M communications), should not be considered as interpersonal communications services.

It is apparent from recital 17 of the EECC that, in exceptional circumstances, a service should not be considered to be an interpersonal communications service if the interpersonal and interactive communication facility is a minor and purely ancillary feature to another service and for objective technical reasons cannot be used without that principal service, and its integration is not a means to circumvent the applicability of the rules governing electronic communications services. As elements of an exemption from the definition the terms ‘minor’ and ‘purely ancillary’ should be interpreted narrowly and from an objective end-user’s perspective. An interpersonal communications feature could be considered to be minor where its objective utility for an end-user is very limited and where it is in reality barely used by end-users. An example of a feature that could be considered to fall outside the scope of the definition of interpersonal communications services might be, in principle, a communication channel in online games, depending on the features of the communication facility of the service.

Interpersonal communications services are further divided into two categories depending on whether the communication takes place with or without the use of numbers:

  • number-based interpersonal communications services: these are interpersonal communications services that connect or enable communication with the use of numbering elements assigned on the basis of the provisions of ZEKom-2 on numbering, namely with a number or numbers from the numbering plan of the Republic of Slovenia adopted by the Agency, or from an international numbering plan. (they include, for example, mobile and fixed telephony);
  • number-independent interpersonal communications services: these are interpersonal communications services that do not connect with the use of numbering elements. They include numerous OTT services which enable communication via Internet access services (e.g. WhatsApp, Facebook Messenger, WeChat).

It will still be the case that electronic communications services are normally provided for remuneration. It is now clarified that the concept of remuneration should be interpreted in a broader sense (see recital 16 of the EECC), so that it should also encompass situations where the provider of a service requests and the end-user knowingly provides personal data or other data directly or indirectly to the provider. It is also emphasized that the concept of remuneration should also cover cases where the end user allows access to information without actively providing it (for example, personal data, including IP address, or other information that is generated automatically, such as information collected and transmitted by cookies). According to the case law of the CJEU, remuneration also exists if the service provider receives payment from a third party and not from the recipient of the service. The concept of remuneration should therefore also encompass situations where the end user is exposed to advertisements as a condition for gaining access to the service, or situations where the service provider monetises personal data it has collected in accordance with the GDPR (recital 16 EECC).

In view of the definitions presented above, the legal regime applicable to number-independent interpersonal communications services will be particularly important for OTT service providers.

As is apparent from recital 18 of the EECC, it is justified to treat number-based interpersonal communications services differently from number-independent ones, as the former participate in, and hence also benefit from, a publicly assured interoperable ecosystem, while the latter do not. According to Article 5 of the draft proposal for ZEKom-2, the providers of number-independent interpersonal communications services will not be obliged to notify the Agency of the commencement of the provision of such services, nor will they be obliged to pay to the Agency annual fees on the basis of the notification. The proposal of one of the largest Slovenian operators to impose on OTT service providers the obligation to pay to the Agency annual fees could not be taken into account due to EECC provisions; it reflects, however, persistent attempts of traditional operators to ensure level playing field for OTT service providers and traditional operators.

Only limited set of obligations will apply to OTT service providers where this is in the public interest (e.g. ensuring a level of security appropriate to the existing risk, given the fact that they do not normally have effective control over the transmission of signals over the network – recital 95 of the EECC). OTT service providers will also not necessarily be immune to ex ante regulation designed to ensure competition in the market. The basis for such regulation is provided by Article 128 of the draft proposal for ZEKom-2, which is a novelty compared to ZEKom-1 and according to which the Agency could, in justified cases, where end-to-end connectivity between end-users is endangered due to a lack of interoperability between interpersonal communications services, impose obligations on relevant providers of number-independent interpersonal communications services which reach a significant level of coverage and user uptake, to make their services interoperable. Such obligations could be imposed by the Agency only after the entry into force of the regulations adopted by the European Commission in accordance with Article 61(2) of the EECC.