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ACM forces T-Mobile to stop its ‘Data-free Music’ service

The Netherlands Authority for Consumers and Markets (ACM) forces telecom provider T-Mobile to stop offering and operating its ‘Data-free Music’ service (in Dutch: Datavrije Muziek). This service violates Dutch regulations on net neutrality. If T-Mobile continues to offer the service they will be imposed an order subject to periodic penalty payments. The penalty payment is EUR 50,000 per day with a maximum of EUR 500,000.

‘Zero-rating’ may harm competition

Data-free Music is a service for streaming music that does not count against the data plans of T-Mobile customers. This is called zero-rating. Henk Don, Member of the Board of ACM, explains: “Dutch law is clear about zero-rating: is it not allowed. That is why ACM is taking action. Zero-rating may harm competition between online services, especially those services that use a lot of data such as Spotify and YouTube.”

It is now up to the courts

On 10 October, 2016, T-Mobile launched its ‘Data-free Music’ service. Right after the launch, ACM announced it would investigate the service in order to find out whether or not it violated the regulations on net neutrality. On April 30, 2016, a new European regulation on net neutrality came into force. According to European telecom regulators, certain services can, under strict conditions, be offered for free or at favorable rates. Under Dutch law however, no price discrimination of any kind is allowed. More expensive is not allowed, but cheaper or for free is not allowed either. It is up to the courts now to decide whether or not Dutch law conflicts with the aforementioned European regulation.

“There is no such thing as free data”

At first glance, listening to music for free sounds very sympathetic. However, by offering an online service that does not count against their data plans, internet users may be influenced in the way they use the Internet. Mr. Don adds: “There is no such thing as free data: it causes other services to become more expensive”.