Zero-rating is only attractive to consumers when data caps are low and data is expensive. When Discriminatory Zero-Rating is Banned, Data Caps Go Up and Prices Come Down That’s not just unfair, it cements the market power of the dominant platforms. The two-most zero-rated apps? WhatsApp and Facebook. Of the top 20 zero-rated apps in the E.U., only 3 are from Europe. In fact, the majority of zero-rated apps were only able to participate in at most three plans. Only the largest companies have the resources and clout to fully take advantage of these programs. In addition, a 2019 Epicenter.Works study found that there were 186 different zero-rating offerings across Europe. Meanwhile, Apple Music was featured in 26, and Spotify was in 23. After ten months of work, it was included in 3 plans. 25 carriers did not offer a way to apply or did not reply to AudioMack’s application. The company looked into 34 zero-rating plans in Europe that are open to music apps. AudioMack, a music application that is growing rapidly in the U.S., wanted to get a foothold in Europe. Moreover, large carriers often don’t even reply to smaller companies that apply, and, even when they do, getting in isn’t easy. That’s hard for everyone, but impossible for many startups, small players, and non-commercial speakers. Whenever a company makes changes to its service, it has to go through the process again. For instance, services have to spend time and money to work closely with carriers on traffic identification. Joining zero-rating plans is technically difficult, time-intensive, and costly, especially for small competitors. These plans disproportionately benefit the biggest platforms because only the largest companies can afford to participate in many zero-rating plans. While these sorts of plans are theoretically open to all competitors for a given type of application, they typically include only a few applications. When data used on Facebook doesn’t count against the cap while data used to access an upstart competitor does, it’s easy to see why consumers will stick with Facebook even when the competitor offers a better product.Īt issue in the recent court decisions were so-called “open” zero rating plans, or plans that purported to zero-rate entire categories of apps such as music or video streaming. As a result, people prefer zero-rated content over content that eats up their data. Many people are wary of going over their cap, because that leads to steep fees or slow connections. For example, many European carriers offer plans that don't count the data you use on Facebook or Whatsapp against your data cap.Ĭhoosing which apps get zero-rated has a powerful effect on user behavior. Zero-rating is a practice where a carrier does not count some online activity against a users’ data cap. Carriers will no longer be able to limit how people can use their data or push them to use apps from the dominant platforms.īEREC, which is comprised of the national telecom regulators from across the EU, will vote on the new rules in June, but is under intense pressure from Facebook, Google, and big telecoms to leave in loopholes so discriminatory zero-rating can continue.ĭiscriminatory Zero-Rating Cements the Market Power of Dominant Platforms What BEREC decides will affect millions of Europeans, and, if BEREC gets it right, will boost how much data people get every month while restoring competition online. These discriminatory schemes almost invariably favor the carrier’s own services or those of giant platforms like Facebook and YouTube. In a proceeding that has gotten almost no press attention, BEREC is deciding what the new rules should be for carriers that “zero-rate” some applications by exempting them from customers’ monthly data caps. The E.U.’s top telecom regulator BEREC is set to issue new net neutrality rules, after the European Court of Justice found that discriminatory zero-rating plans such as T-Mobile’s StreamOn and Vodafone’s Pass violate Europe’s net neutrality law.
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