FREQUENTLY ASKED QUESTIONS
OTT REGULATION IN A NUTSHELL
At Schalast Rechtsanwaelte, we regularly experience some confusion about the term OTT service. Furthermore, there seems to be dangerously little awareness among OTT providers about the changes that the new legal regime will bring to them. However, the legal ramifications of non-compliance are bound to be significant and range from heavy fines and private lawsuits even to the order to discontinue the service altogether.
These FAQ shall create some urgently required awareness, help affected enterprises to understand the basic consequences of OTT services’ regulation and outline the necessary steps to safeguard future compliance.
Is the term OTT communications service a legally defined term?
No.Although the term over-the-top(OTT) communications service is largely used both in official and other sector-specific publications, it is not legally defined terminology. TheEuropean Electronic Communications Code (EECC) addresses OTT services as number-independent interpersonal communications service (EECC Art. 2(7)). However, there is general understanding that these terms mean the same thing and in accordance with this understanding, we use these terms synonymously on this website.
What is the European Electronic Communications Code?
The full title of the EECC is Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code. An EU-directive harmonizes a certain legal field and obliges the EU member states to incorporate its rules into their respective national law. While OTT service providers are therefore not bound directly by the EECC but the national laws of the member states, the EECC’s provisions can still be taken as a reference to analyse the requirements of compliance.
However, the EECC still leaves some scope to national legislators, thus rendering local legal expertise indispensable. At Schalast, we addressed this challenge by creating an EU-wide network of law firms via the Multilaw network.
What is changing with implementation of the European Electronic Communications Code?
While a call via WhatsApp and a call via one’s traditional telephony provider may seem the same to a user, using an app or dialling a number had made all the difference in the face of EU regulatory law in the past. This changed as of 21 December 2020, the date when the European Electronic Communications Code (EECC) had to be adopted EU-wide. Under the EECC, OTT service providers must comply with a significant number of new regulatory requirements.
Read here in which 4 areas the EECC has the greatest impact.
Does the EECC require the service to allow PSTN breakout to be regulated?
No, under the new regulatory regime, the possibility to reach national and/or international call numbers is not required any more.
How does this affect me or my business?
The EECC creates a level playing field between providers of OTT services and traditional telecommunications providers. This means that OTT service providers have to comply with a significant number of new regulatory requirements. Particularly affected areas are public safety and security, contract regulation, as well as consumer and data protection. Dedicated national regulatory agencies will oversee and enforce compliance. Non-compliance entails the threat of heavy fines and further ramifications.
Am I exempted from regulation if my company is registered outside the EU?
As long as an OTT service provider offers its services in a member state of the EU, the answer is a clear no. The application of the relevant regulatory law is based on the so-called marketplace principle. In our view, it is sufficient if the necessary app is offered via digital platforms such as Google’s Play Store or Apple’s App Store. This means that hardly any service provider may ignore these requirements.
Is there any chance to avoid these regulatory obligations?
Simply exiting the EU as a market of one’s product will hardly ever be an economically viable strategy. Apart from that, communications services that are provided without remuneration fall outside the scope of regulation. However, the concept of remuneration must be understood extremely widely. It includes not only monetary payments by the user but also a user’s provision of personal or other data in exchange for the right to use as well as payments by third parties, in particular as a result of advertising.
Where can I find the relevant laws and regulations?
A collection of the relevant laws and regulations as well as links to further official publications can be found on the website. Unfortunately, the scope of relevant legal documents impedes a quick overview. Besides the EECC, further European law must be considered. Furthermore, both the EECC and other relevant EU directives still leave significant scope to national legislators. Awareness of the respective national particularities and developments is indispensable.
Check our list of NRA’s regulatory plans to stay up to date.
What should I do if I think my service is now regulated?
First, double-check your conclusion or ask a qualified third party to do so. There is more than one grey area when it comes to the application of the relevant laws and the scope of regulation differs depending on the technical abilities of the service. To identify all necessary changes and implement the contractual and procedural compliance measures, we recommend conducting a comprehensive gap analysis. If your company’s resources are already thinly stretched, seeking external support may be both the most economical and quickest way to ensure compliance.
