Ad-Blocker

October 21, 2022

Advertising on the Internet: What can publishers do against ad blockers?

Content that can be accessed free of charge on the internet is usually financed by placing advertisements. Not only large media and publishing houses monetise their editorial content in this way - entire professions have developed whose business model is based on advertising-financed content, affiliate links and partner programmes.

However, advertising financing only works as long as the advertising is displayed to the users. The increasing spread of ad blockers could become a problem for the industry. In Germany, 20-30% of users are said to use such ad blockers. As a result, the publishers' revenues will logically fall by a corresponding percentage. In perspective, this threatens the business with online advertising as a whole.

"Whitelisting" of acceptable advertising or "Acceptable Ads"

Therefore, it is hardly surprising that the big German publishing houses have really been overcharging the providers of ad blockers with lawsuits in the last few years. This has included a dispute over a practice that was supposed to enable publishers to make their advertising visible even to users with an activated ad blocker: Some providers of ad blockers - namely the German market leader "Adblock Plus" by the Cologne-based provider Eyeo GmbH - have activated a so-called "white list" in their default setting, which contains websites whose advertising is not intrusive and thus "acceptable", so-called "acceptable ads". It is not the provider or content of the advertising that is important here, but the design and integration of the advertising on the respective website. On these pages, the user is thus shown advertising even if he has activated an ad blocker. However, he can also deactivate the "whitelist" with a few clicks.

Every website operator can apply to be included on this "whitelist". The provider of the ad blocker then checks whether the advertising displayed on the page meets the criteria of "acceptable" advertising and then activates it. This process is only chargeable for "large" companies. A company is considered large if it records 10 million additional advertising impressions per month by activating the previously blocked advertising. Then 30 % of the revenue generated by this must be paid to the ad blocker provider as a "licence fee".

So there is an opportunity here for smaller companies: they can achieve free inclusion on the whitelist, provided that the advertising placed on their website can be classified as "acceptable". Of course, this is only possible if the respective provider offers a concept comparable to this Adblock Plus model.

Wave of lawsuits against ad blockers

The big media and publishing houses, above all Axel Springer Verlag, were not very enthusiastic about the idea of paying companies that initially block advertising on their websites to unblock it again under certain conditions. The accusation of "modern highway robbery" was raised. Proceedings against ad blockers as such and the associated business model of whitelisting were and are still pending before various regional courts throughout Germany. Among other things, violations of competition law, antitrust law and copyright law as well as an attack on the freedom of the press are being asserted. The success of these efforts varied. The Regional Courts in Munich (e.g. judgements of 27 May 2015, ref. 37 O 11673/14 and 37 O 11843/14, actions brought by the media houses ProSiebenSat 1 and RTL) and Stuttgart (judgement of 10 December 2015, ref. 11 O 238/15, action brought by WeltN24 GmbH) considered both the ad blockers and the model of paid whitelisting to be permissible in principle. In Frankfurt (decision of 26.11.2015, ref. 3-06 O105/15, application for a temporary injunction regarding "welt.de" of Axel Springer Verlag), however, the opinion was different and prohibited the sale of ad blockers. In Hamburg, there was even disagreement within the senates, so that a decision was made in favour of the admissibility of ad blockers (judgement of 21 April 2015, ref. 416 HK O 159/14), but then again the Axel Springer Verlag was found to be in the right, in this case in the matter of BILD (judgement of 1 December 2015, ref. 308 O 375/15). In the latter case, however, the subject matter was another programme of Eyeo GmbH, with which it was again possible to circumvent a block set up on Bild.de.

The situation at the regional court level is confusing, but a tendency in case law to consider the practices of ad blocking and whitelisting to be permissible can clearly be seen.

In the meantime, Axel Springer Verlag has already gone through the entire process of appeal with a lawsuit against Eyeo GmbH. In its judgment of 24 June 2016 (Case No. 6 U 149/15), the Cologne Higher Regional Court differentiated and amended a judgment of the Cologne Regional Court (29 September 2015, Case No. 33 O 132/14), which had initially dismissed the action, in favour of Axel Springer AG: An ad blocker that blocks all advertising may be sold, but the model of a paid whitelist is inadmissible. While the regional courts had previously assumed that ad blockers were unfair, if at all, because of a targeted obstruction of competitors within the meaning of Section 4 No. 4 UWG, the Cologne Higher Regional Court took a different approach: Paid whitelisting was an aggressive business practice pursuant to § 4a UWG vis-à-vis the advertising customers of website operators. However, the reasoning of the OLG Cologne has some inconsistencies and also met with criticism in the legal literature. The Federal Supreme Court (BGH), which was then appealed to by Eyeo GmbH, subsequently declared both the business model of ad blocking and whitelisting permissible (BGH ruling of 19 April 2018, Case No. I ZR 154/16, "Werbeblocker II"). The court could not identify a violation of competition, antitrust or copyright law. The BGH stated that the ad blockers would not result in a targeted restraint of competition within the meaning of Section 4 No. 4 UWG. There was also no inadmissible influence on the users for an aggressive commercial act pursuant to § 4a UWG, as no position of power was exploited vis-à-vis them. Rather, internet users decided on their own whether or not to use ad blockers. Also, there would be no direct influence on the contents of the website, nor would protective measures of the websites against ad blockers be circumvented. The BGH also did not see ad blockers as an unreasonable encroachment on the freedom of the press, as possible defensive measures could be taken by using programmes. The Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) did not accept the constitutional complaint filed by Springer Verlag against the ruling for decision (BVerfG, decision of 22.08.2019, ref. 1 BvR 921/19). Springer Verlag was unable to sufficiently demonstrate an encroachment on the freedom of the press by the adblockers to convince the court to review them.

RTL also instigated proceedings against Eyeo GmbH and its product AdblockPlus, arguing in particular that the business model was unfair and in breach of antitrust law. The LG München I and then the OLG München again ruled in favour of Adblock Plus (judgement of 17 August 2017, ref. U 2184/15). However, the Federal Supreme Court (BGH), which was then called upon by RTL - this time by its antitrust panel - overturned the ruling of the OLG Munich in large parts (BGH, ruling of 08.10.2019, ref. KZR 73/17, "Werbeblocker III"), whereby this time in particular a compatibility with Section 19 of the Act against Restraints of Competition (GWB) is in dispute, and referred the case back to the OLG Munich for review. A decision there is still pending.

The BVerfG's rejection of the review of the ruling in the case of "Ad Blocker II" certainly represents a certain break in the dispute over ad blockers and strengthens providers such as Eyeo GmbH. However, an end to the dispute is not yet in sight. Publishing and media companies in particular, such as Springer Verlag, have already announced that they will continue to take legal action against the business practice, which they say causes them millions in losses every year.

Conclusion

Smaller companies or self-employed persons should therefore find out for the time being whether they can possibly be whitelisted free of charge by the leading providers of ad blockers. "Adblock Plus" and "AdBlock" have created a joint platform to simplify this process. Apart from that, all website operators have the option of asking visitors to their own website to deactivate the blocker for the site or to block them from visiting the site.

Incidentally, it is already noticeable that more and more website operators are introducing payment barriers to finance their online offers. It remains to be seen to what extent the future jurisdiction regarding ad blockers will influence this development.