German Court Clears Adblock Plus of Extortion Charge
The makers of Adblock Plus, Eyeo GmbH, yesterday celebrated a victory in court after a four-month-long trial in which they were accused of “highway robbery” and anti-competitive conduct. PageFair data has repeatedly confirmed that adblocking is becoming a growing problem for publishers and advertisers alike, so this could be a landmark decision that reverberates throughout the Internet for years to come and leads to the widespread extinction of content producers who refuse to do business with Adblock Plus to bypass their adblocking filters.
The case revolved around the Adblock Plus concept of blocking all advertising by default, the unblocking of some advertisers on an individual basis, and, in some cases, the payment of a fee. Eyeo maintains a whitelist which allows some advertisers through the adblocking filter, as long as the advertisers conform to rules for “Acceptable Advertising” drawn up by Adblock Plus itself. The list of criteria to be accepted is extensive and is in general admirable, such as requiring that ads be static, not obscure the content of a site and be clearly distinguishable from site content. But many advertisers and publishers have questioned whether it is appropriate for the makers of Adblock Plus to have such control over the process, especially as inclusion often comes down to whether Eyeo has been paid by the advertiser, regardless of the content of their ads.
Basing their case on this question of payment in exchange for inclusion, representatives for the plaintiffs described the Adblock Plus business model as “highway robbery”, even going so far as to call it “extortion”. The plaintiffs, Zeit Online GmbH (zeit.de) and Handelsblatt GmbH (handelsblatt.com and wiwo.de), claimed injunctive relief to prevent Eyeo from blocking ads on their websites.
Eyeo responded to criticism of their approach by claiming that up to 90% of sites are included for free in the whitelist, with only high-revenue names such as Google, Microsoft or Amazon being charged for inclusion. Some online sources have claimed that payments to Eyeo from these online giants run to tens of millions of euro.
In delivering their decision that Adblock Plus was not anti-competitive, the judges referred to the example of websites such as The New York Times, which offers ad-free access behind a paywall, and also said that they failed to see that Eyeo had explicitly targeted the websites of the plaintiffs, a factor which was apparently vital to proving the case for injunctive relief under anti-competition law.
A 2004 case had already confirmed the legality of advertising filters for television broadcasts, so the result of the court case was not entirely unexpected. That case may provide some precedence, but the TV adblocker Fernsehfee was far less intrusive than Adblock Plus when it comes to interfering with content. As we have previously pointed out, publishers are often shocked when they realise just how extensively Adblock Plus modifies content in the crusade to remove ads. Eyeo was also able to refer to the legal expertise of Dr. Thomas Hoeren of the University of Muenster, who in 2013 came to the conclusion that Adblock Plus does not represent anti-competitive conduct and in no manner unduly influences the market.
The ruling certainly isn’t the end of the legal wrangle, with similar cases making their way through the courts in other parts of Germany and no guarantee that courts in other parts of the world will come to the same conclusion. But it is a clear message that adblocking is not going away anytime soon and is heavily resistant to legal forms of attack.
Keen to spot their opportunity, Eyeo has used the decision to “reach out to publishers and advertisers and content creators and encourage them to work with Adblock Plus rather than against us”. The spirit of this message, to “develop new forms of nonintrusive ads that are actually useful and welcomed by users”, is certainly something we agree with at PageFair, but we have to temper this with reference to concerns we’ve brought up before regarding the tyranny of the default.
The court ruling assumes that Internet users are making informed decisions about what they want to see on the websites they visit, evoking a world in which each site and each advertiser is being judged on its own merit by the consumer. But that assumption completely ignores the powerful effect of the tyranny of the default. People always assume that default settings have been conscientiously chosen for them, and are reluctant to meddle with them. With Adblock Plus, however, the primary factor behind the choice of default setting is whether a publisher was willing open themselves up to paying a toll.
Users who make the decision to turn to adblocking because they were irritated by a few popups or pre-roll ads suddenly enter an online environment purged of all advertising – except for ads produced by advertisers who have run the gauntlet of Eyeo’s strict Acceptable Advertising rules and – in some cases – also paid off the gatekeeper.