A recent German Federal Court of Justice decision may have a significant impact on content providers’ business models. Offering software that allows users to block advertising does not constitute an unfair commercial practice. Even providing advertisers with the option to pay for showing certain ads—a practice known as whitelisting—does not violate the unfair competition rules.
Issued on April 19, the decision involved a legal dispute between the ad blocking software provider Eyeo GmbH and the online-content provider Axel Springer (which also happens to be Germany’s largest publishing house). The decision overruled the Higher Regional Court of Cologne’s previous decision, which, like the Federal Court of Justice, did not categorize Eyeo’s offer of its ad blocking product as an unfair competition practice, but did categorize paid whitelisting as unlawful.
Axel Springer is now left with the final option of taking the case to the Federal Constitutional Court.
Background and core arguments of the parties
Eyeo, a German software company, offers the product AdBlock Plus, which allows Internet users to block ads online. The product became the most popular ad blocking software in Germany and abroad, with over 500 million downloads and 100 million users worldwide.
In 2011, the company started to monetize its product by offering a whitelisting service that gives advertisers the option to pay to show their ads. To get on Eyeo’s list of companies whose ads are not blocked, advertisers have to comply with Eyeo’s “acceptable advertising” conditions and share their ad revenue with the company. The conditions dictate the advertising’s features such as its placement, size, and—in the case of text advertising—color.