Advertising plays a critical role in modern internet service provision. It is a source of revenue through which most websites are funded. This fundamental economic function of on-line advertising coupled with capitalism has seen the increase as well as an expansion of the scope of web content. Therefore, without online advertising, internet service providers and website operators will lose their mainstream revenue hence their ability and capacity to provide and sustain web content will be hampered (Schwabach 6).
General forms of online adverts include pop-ups, sponsored search engine results, banner adverts, expanding and floating advertisements and adverts through emails (Schwabach 6). Apart from serving as a source of revenue for web content providers and by extension to internet service providers, it is instrumental in the promotion of press freedom and freedom of expression. Besides, they inform web content consumers on trends in supply side of the market. However, some of the adverts are so intrusive and annoying. Such intrusion raises legal issues such as trespass and privacy violation.
Consequently, most internet users and internet service providers have resorted to self-help remedies against intrusive advertising. One major such self-help mechanism is ad-blocking software. Internet user would download an ad-blocking software and install it on their operating system. It would then detect unwelcome advertisements and block them (Schwabach 7).
Adobe and PageFair in their 2014 joint report defined ad-blocking as the use of certain “extensions, browsers, VPNs or DNS solutions” to “act as a firewall between the web browser and all known ad servers” (PageFair and Adobe 14). Ad-blocking technology is not new. Its history dates back to 2002 when the first reported code was developed. It was written by Aasted Sorensen. It took a form of browser extension which could be downloaded and installed in a web browser. However, this technology did not gain significant traction till a decade later (Searls).
The introduction of ad-blockers on mobile devices has to a large extent increased the number of people who use the technology for blocking unsolicited adverts. As a result, the ability of online publishers and website operators to generate revenue out of their services is threatened with this trend (Ember and Benner).
According to the report on a joint survey conducted by Adobe and PageFair, it was predicted that ad-blocking was going to cost internet service and web content providers approximately $22 billion worth of revenue in the year 2015. It was based on the fact that global blockers had registered an annual growth rate of staggering 41% by the year 2014. In the US alone, 45 million people, which represent 16 percent of internet users in the country, used ad-blocking technology. In Europe, on the other hand, the technology usage rose by 35% making the number of active monthly ad-blockers hit 77million. By June 2015, the number of internet users actively using ad-blocking technology had risen to 199 million (PageFair and Adobe 3-4). The 2015 Adobe and PageFair Report further enunciate the reasons for ad-blocking the common ones being misuse of personal information by advertisers and increasing the number of annoying ad intrusive adverts (PageFair and Adobe 12).
Jurisprudence on ad-blocking technology is not yet settled. Law suits have not ensued despite the fact that the technology entails fundamental legal issues such as unfair competition, violation of the right to privacy, trespass, copyright infringements, violation of terms and conditions. For instance, ad-blocking, has been said, indirectly aids copyright infringement by denying distributors of copyrighted material their revenues. However, this correlation is too remote. Copyright infringement arguments may attach with respect to the fact that ad-blocking software illegally modifies original web page of publishers by filtering out the adverts. However, such claims have so far failed. Potential violations of terms and conditions of websites by ad-blockers argument has failed to hold water due to avoidance of such terms since most web content consumers are not given to option of rejecting them. (Heshmaty). Additionally, the fact that content providers have the option of excluding visitors having ad-blocking software in their browsers from accessing their content operates against them (Fox and Neeman). It is predicted that with the current trend of ad-blocking technology entrenched by the introduction of iOS 9 by Apple that has ad-blocking capabilities, litigations on the topic will be inevitable (Hern).
Nonetheless, there is emerging jurisprudence on the topic in Germany. Though still evolving, German courts appear to be taking the position that ad-blocking is legal and that its practice does not amount to uncompetitive business practices. A landmark case in question is the Zeit Online GmbH and Handelsbalatt GmbH v Eyeo GmbH case. In the suit, the plaintiffs who are online newspapers publishers sought an injunction against Eyeo GmbH from selling its AdBlock Plus software (Cole).
The plaintiffs premised their suit on the grounds that the ad-block software illegally impeded their business models by allowing their respective content consumers to block their sponsored advertisements. Additionally, the plaintiffs argued that the AdBlock Plus software was discriminatory in the sense that it allowed “acceptable adverts” to pass through its filter mechanisms upon payments by their sponsors to the defendant. Hence its conduct was anticompetitive. Moreover, the plaintiffs relied on the freedom of the press in their pleadings (Blanchfield).
On the other hand, the defendant predicated its defense on the ground that its software enabled internet users to realize their constitutional right to privacy. Responding to unfair completion claims, they argued that more than 90% of websites are included in the “white lists” at no costs whereas high-end brands such as Amazon, Google, and Microsoft are charged in exchange for inclusion (Blanchfield).
The Munich Regional Court ruled against the plaintiffs maintaining that AdBlock Plus was legal in that its conduct did not amount to an anti-competitive restriction of online offers funded by advertising. Its reasoning was informed by the fact that the defendant was not endowed with adequate market dominance to be able to sufficiently restrict adverts from reaching a considerable number of intended consumers (Blanchfield).
The ad-blocking technology suit was not the first one to be dismissed. Digital GmbH had instituted a similar suit in 2013, but it was dismissed as well. There are other similar anti-ad-blocking technology suits pending in German Courts. It is unclear what direction jurisprudence is going to take since it is too early to predict (Cole). Furthermore, the ruling was made by a regional court implying that it will not constitute a binding precedent in the other courts. However, its reasoning may serve the persuasive purpose (Pelegrin).
As aforementioned, jurisprudence on ad-blocking technology in the US is almost non-existent. However, with the introduction of ad-blocking enabled operating systems by Apple, legal actions will inevitably ensue. The law on the same is not clear, and prediction of what the courts will hold is premature. However, if they take the current German position, it will have significantly negative impacts on internet service and web content provision. It will deny internet service and web content providers their revenues. Given that most of them rely primarily on income from advertisements, they may close shop. Consequently, there will be less diversified content on the web. Additionally, it will reduce the fields of choice for consumers by restricting if not completely eliminating information on market supply dynamics (Searls).
Nevertheless, court decisions to the effect that ad-blocking technology is legal may benefit web content consumers eventually. It gives them more control over their internet experience. As a result, they will be able to surf the internet freely without being bothered by annoying and unsolicited advertisements (Searls).
In conclusion, this paper calls for a synergy between the delicate interests of internet service providers and web content providers in revenue from their works through sponsored adverts and the interests of content consumers in enjoying their right to privacy and freedom from intrusive adverts.
Works Cited
Blanchfield, Sean. "German Court Clears Adblock of Extortion Charges." 22 April 2015. PageFair. 5 March 2016 <https://blog.pagefair.com/2015/german-court-clears-adblock-plus-of-extortion-charge/>.
Cole, Miranda. "Ad Blocking Declared Legal: German Court Dismisses Discrimination Claims Brought by Publishers, but AdBlock Plus Maker Eyeo is Not Home Free Yet." 27 April 2015. Convicton. 5 March 2016 <https://www.insidetechmedia.com/2015/04/27/ad-blocking-declared-legal-german-court-dismisses-discrimination-claims-brought-by-publishers-but-adblock-plus-maker-eyeo-is-not-home-free-yet/>.
Ember, Sydney and Katie Benner. Enabling of Ad Blocking in Apple’s iOS 9 Prompts Backlash. 18 September 2015. 5 March 2016 <http://www.nytimes.com/2015/09/19/technology/apple-ios-9s-enabling-of-ad-blocking-prompts-backlash.html?_r=0>.
Fox, Herzog and Ariel Yosefi Neeman. "Concern for Ad-Blocking Technologies Pursuant to a New Court Ruling." 18 January 2016. Lexology. 5 March 2016 <http://www.lexology.com/library/detail.aspx?g=614e3148-4449-4d00-a9c6-aed0e26b5953>.
Hern, Alex. A proxy war: Apple ad-blocking software scares publishers but rival Google is target. 1 January 2016. 5 March 2016 <http://www.theguardian.com/technology/2016/jan/01/publishers-apple-ad-blockers-target-google>.
Heshmaty, Alex. "The ad blocking debate." November 2015. Internet Newsletter for Lawyers. 5 March 2016 <http://www.infolaw.co.uk/newsletter/2015/11/the-ad-blocking-debate/>.
PageFair and Adobe. The Cost of Ad-blocking. Research. San Jose California: Adobe systems Inc., 2015.
Pelegrin, Williams. "Wondering if AdBlock Plus is Legal? A German Regiona Court Answered With an Emphatic Yes." 22 April 2015. Digital Trends. 5 March 2016 <http://www.digitaltrends.com/web/adblock-plus-legal-to-use-german-court/>.
Schwabach, Aaron. Internet and the Law: Technology, Society, and Compromises. Santa Barbara California: ABC-CLIO, LLC, 2014.
Searls, Doc. The End of Internet Advertising as We’ve Known It. 11 December 2015. 5 March 2016 <https://www.technologyreview.com/s/544371/the-end-of-internet-advertising-as-weve-known-it/>.
