My colleague Emil Odling, lead partner for IP and Technology in Stockholm, has written the piece below discussing a decision this week of the Swedish courts which suspends the decision of the Swedish regulator which would have required Telia to stop some practices on the basis that they infringe the net neutrality rules. Note that although the offers concerned are zero-rated it appears that the PTA’s (now suspended) decision looked at traffic management more generally and did not consider zero-rating specifically.

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On 8th of March 2017, the Swedish Administrative Court of Appeal ruled to inhibit the Swedish Post and Telecom Authority’s (“PTA”) decision to prohibit partially state-owned telecom and mobile network operator Telia Company AB’s (“Telia”) distribution of two services which according to the PTA constituted a breach of the so called Open Internet Regulation.

The case originates from the PTA’s decision from 24 January 2017 which with immediate effect prohibits Telia’s distribution of the services Social and Lyssna (Eng. Listen). The services allow customers to continue the usage of social networks like Facebook, Kik and Whatsapp (Social) and music services like Spotify and various radio services (Lyssna), even after the customer’s data bundle allowance has depleted. According to the PTA, the two services violate the net neutrality rule in article 3(3) of the Open Internet Regulation, since Telia by distributing the services, does not treat all internet traffic equally and none of the exceptions in the article are applicable.

Telia, on the other hand, argued that the services do not include any such prohibited traffic management as the regulation aims to prevent and that an immediate discontinuance of the services in practice would entail an obligation for Telia to take substantial technical and administrative measures, which would have disproportionally negative effects on Telia and its end customers.

The court found that Swedish precedence on inhibition of official decisions generally requires that the appealed decision is highly likely to be approved by the ruling court. However, if the official decision is of such character that it is of great importance to the appellant that the decision is inhibited, the threshold of “highly likely approval” may be reduced to that the outcome of the case is “uncertain”.

On the basis of the abovementioned, the court found that it had no reason to question Telia’s assertion that an immediate discontinuance of the services would incur substantial negative effects on Telia and its end customers. Therefore, the court found that the threshold for inhibition should be reduced to that the outcome of the case is “uncertain”. Due to the fact that the Open Internet Regulation is a fairly new legislation and that there is no established Swedish precedence, the court found that it is not possible to assess the outcome of the case and that the outcome therefore is uncertain. Hence, the court ruled in favor of Telia to inhibit the PTA’s decision.

Although the question regarding inhibition has been ruled in Telia’s favor, the material question regarding net neutrality and the application of article 3(3) of the regulation is yet to be assessed by the Swedish Administrative Court. It should also be noted that the PTA’s decision expressly did not comprise “zero rating” type of traffic, but merely Telia’s alleged traffic management in breach of net neutrality. Thus, the case will comprise the question whether Telia’s services include unauthorized traffic management according to article 3(3) of the Open Internet Regulation and not if the services violate the regulation from a “zero rating” perspective.