Axel Springer Faces Down Adblock Plus in Court

Last month we covered the unfolding legal attacks against Adblock Plus, which began in December with two hearings in Munich, Germany.  On Tuesday, March 10th the European media giant Axel Springer presented its case against Eyeo GmbH (the company behind the immensely popular free adblock plugin, Adblock Plus) in a short court hearing in Cologne, Germany.
Although it was just an initial hearing, there were clear similarities with the previous cases in December.  An initial attempt to target adblocking per-se failed to get traction, but was swiftly followed by a more fruitful attack on Adblock Plus’ primary business model.  Axel Springer first sought a court-ordered ban on Adblock Plus, but the court gave a preliminary opinion that banning any software in this way would not be possible.  Axel Springer then attacked Adblock Plus’ Acceptable Ads program, reiterating arguments that were made by media giant RTL in December.
The gist of this argument is that Adblock Plus’ behavior of selectively whitelisting publishers is anti-competitive; it puts companies that do not have access to the whitelist at an unfair disadvantage to those that do.  Eyeo is quite open about the fact that they charge larger publishers a fee as a condition of their participation in this program.  It seems that the publishers are not criticizing the fact they are being charged (as one might expect), but more specifically that publishers are being charged different rates.  They allege that there is an “insider” rate charged to some publishers, while everyone else is charged an exorbitant fee of 30% of the unblocked ad revenue.

The judge may agree, calling the whitelisting practice “highly questionable.”

The Financial Times recently revealed that Google and Bing are on Adblock Plus’ whitelist, and the sentiment is that they are probably among those charged this special flat rate.  If not, then Google would be paying Eyeo something in the region of $1BN per year (i.e. $40BN annual revenue x 10% est. adblocking x 75% approx. adblock plus marketshare x 30% rev share).  From the point of view of large publishers who are unwilling to pay the standard fee, the whitelist looks like a cartel.  To them, the handful of super-publishers that are getting the insider rate are simultaneously funding adblocking while enjoying immunity from it.  The judge may agree, calling the whitelisting practice “highly questionable.”
The question of whether the Acceptable Ads program is anti- or pro-publisher is clearly a complicated one that requires more analysis.  The court decided that it would consider oral arguments, but that the parties should also make written submissions, which will considered before the next hearing on May 5th.  This next hearing is likely to be the first of many required in order to resolve a case concerning competition law.  It is impossible to say which way this story will develop, but Claas-Hendrik Soehring, a media lawyer in Axel Springer was bullish, stating that the hearing “confirm[ed] our view that publishers do not need to accept extortion attacks on their web sites.”  Meanwhile, the German daily newspaper Süddeutsche Zeitung announced on Friday March 13, 2015 that they will be launching their own legal offensive against ABP, bringing the total number of simultaneous lawsuits against Eyeo to five.

…awareness of adblock is all that is required to turn someone into an adblocker.

Our opinion at PageFair is that these actions are more likely to contribute to the larger problem of adblocking, rather than to defeat it.  If Eyeo is somehow crippled by these lawsuits, there are many other adblockers ready to take its place, most of which are more radical in their desire to wipe out all online advertising.  The media storm caused by these cases just serves to raise public awareness of the existence of adblock.  And, as it was recently noted at the IAB leadership conference in Arizona, awareness of adblock is all that is required to turn someone into an adblocker.

  • A really foolish way to take on adblocking. By failing to address that which causes people to use adblock in the first place, they’re doing little more than advertising their own intent to force users to accept those same practices, like it or not. Adblocking these days is really mere the symptom; the real issues are more about privacy and selling on of data. The problem just will not go away until there is a wider public debate some sort of workable compromise is reached that is acceptable to both sides and is sustainable as technology changes. Treating consumers views with contempt – as this case appears to do – merely entrenches users attitudes, resulting in a harder nosed outlook when it comes to compromise. The industry has very few fans beyond those who profit from it; alienating the rest is bad politics and bad for business.

  • Do you REALLY wonder why people use things like AdBlock?
    The bandwidth hogging video ads, the flash ads, the animated ads, popovers and popunders.
    Think about it: popovers in particular and animated ads in general are, basically, bloody rude. If you think otherwise just try this: You are having a serious conversation with little Johnny’s father. Little Johnny is leaping up and down yelling “lookatme, lookatme” and pulling a funny face to get your attention. Do you
    a) think how wonderful little Johnny is so personable, how comical he is an dhow you wish you had a child like little Johnny – or
    b) wish his dad would give him a thick ear and explain that it’s rude to interrupt people like that and that he should wait and ask politely for attention when the conversation finishes.
    I submit b)
    I also heartily detest targetted marketing – all that seems to do is to generate ads that follow me round th eINternet telling me the place I just bought a widget from, sells lots of widgets. Hello guys, but I am all widgetted out and you’re only succeeding in pissing me off.
    I detest having some kind of subscription based “free” delivery platform forced down my throat. Hullo Amazon, thanks for that. Its why I now start shopping someplace else rather than suffer your Prime marketing.
    I’d also love an explanation of why I should be interested in what other people bought when I want to order a widget. Why the hell should I care?
    I also have a big problem with the gaudy splash ads at the sides of some online
    journals. Thank God AdBlock kills THOSE stone dead. – We are back to that little sod Johnny.
    Show me a “special offer” and I’ll start checking round. Funnily enough I can almost always do better than the “special offer”.
    Look at it this way: At ad time a company is trying to impress me with its product – that’s a given. It is also trying to impress me as being an outfit I want to do business with. Mindless ads that seem designed specifically to hack me off are scarcely going to make me want to do business. At best any interest I have will be in spite of the ads and, even then I’d be looking for some place else to go. Think Darwin and survival of the fittest.
    It’s not as if minimal ads don’t work; Google seemed to be doing very nicely for a long while (although even they are now getting on my tits a bit with the mindlessley seeding fundamentally useless ads into search results)
    In summary; as far as I am concerned there is one reason and one reason only driving my use of AdBlock: the stupid, mindless, moronic actions of the advertisers (and their principals) themselves.
    Just quit whining and sort the problem YOU created.

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