Adblocking is an increasingly wide-spread phenomenon with huge impact on the online advertising industry. The best known and by far most popular adblocking tool is AdBlock Plus, marketed by the German company Eyeo GmbH. AdBlock Plus is among the most frequently downloaded browser add-ons worldwide, with over 144 million active users reported in 2014 (Source: Page Fair and Adobe 2014 report). AdBlock Plus allows Internet users to decide which advertising content they want to have appear on their screens. The software comes with a pre-selection of blacklisted and whitelisted websites and, by default, users of AdBlock Plus only see advertising content that has been whitelisted by Eyeo. Users are free, in theory, to set their own preferences, but most will probably stick with the default setting.
The decision whether a website goes on the whitelist is taken, so Eyeo contends, by a volunteer community who decide on criteria that must be met for an ad to be acceptable. Whitelisting requires in particular that ads:
- must be static
- should preferably contain only text, and no attention-seeking images and
- must not cover website content or otherwise interfere with the user’s perusal of the website content.
It is easy to see that the first of these criteria creates a serious challenge to media houses that provide free video content from their TV programs online. Such content is often accompanied by short video ads, which lead to an automatic blacklisting under Eyeo’s criteria. Several large German media companies have recently filed lawsuits against Eyeo. These are currently pending at first instance before several German District Courts. They contend that Eyeo engages in unfair competition through its white- and blacklisting selection process. In particular, they maintain that Eyeo is striking individual deals with some companies to pay for whitelisting, in some cases collecting million dollar amounts. That whitelisting is thus allegedly negotiable is said to run counter to Eyeo’s professed aim: To create a better user experience on the Internet.
Further claims brought by some of the media houses are based on copyright infringement and antitrust law. It is disputed between the parties whether or not Eyeo holds, and abuses, a dominant market position. Depending on how one counts, AdBlock Plus has a market share of more than 30% (say the plaintiffs) or 3% (as Eyeo says). Finally, one of the media houses has also brought copyright claims. It argues that the blacklisted websites are being modified in their structure as well as in their content by the adblocking.
In the first oral hearings that have already taken place, the German District Courts took a cautious approach that tends to favor Eyeo’s position. In particular, the courts seemed to be critical of the plaintiffs’ strongest arguments (those based on unfair competition law) at a very early stage in the legal assessment. Several judges said they doubted that Eyeo even is a competitor of the plaintiffs within the meaning of the German Unfair Competition Act. Should this preliminary assessment hold up, it would rule out unfair competition under any of the available heads of claim under the statute.