Dutch regulators on Friday said T-Mobile must end its offer of zero-rated music streaming because the practice violates that country’s net neutrality regulations.
According to the Netherlands Authority for Consumers and Markets (ACM), zero-rating offers like T-Mobile’s “data-free music” may negatively impact competition between online services, particularly in the case of services that use more data, like Spotify or YouTube. The result, the ACM said, is that zero-rating can influence the way consumers use the Internet.
While the ACM noted European telecom regulators do allow some services to be allowed for free or at “favorable rates” under strict conditions, it said Dutch law does not allow price discrimination of any kind.
“Dutch law is clear about zero-rating: it is not allowed,” ACM board member Henk Don said in a statement. “That is why ACM is taking action … There is no such thing as free data: it causes other services to become more expensive.”
T-Mobile, which first launched Music Freedom in the country in October, will be subject to fines of 50,000 euros (around $52,000) per day up to a maximum of 500,000 euros (or around $521,000) if it continues to offer the service, according to ACM’s ruling.
T-Mobile Netherlands on Friday said in a press release it wasn’t surprised by the ruling but confirmed plans to appeal the decision. Until a verdict is reached by the court, T-Mobile said its data-free music service will remain available to customers.
The Netherlands clash over zero-rating echoes a similar battle currently under way in the United States. U.S. critics of zero rating argue the practice violates the spirit of net neutrality, if not the law itself, while the carriers maintain it is beneficial for consumers.
In November, the FCC’s Wireless Telecommunications Bureau queried AT&T about the merits of its zero-rating plan for DirecTV Now, citing “serious concerns” around the anti-competitive nature of the program.
Despite a vigorous defense from AT&T, the Bureau followed up with a second inquiry, this time sent to both AT&T and Verizon, asking the carriers to respond to fresh concerns that their zero rating policies could “hinder competition and harm consumers.”
AT&T and Verizon earlier this month both submitted their defenses to the FCC, in AT&T’s case arguing the Bureau had “articulated no plausible basis for challenging Data Free TV as ‘anticompetitive.’”