Clifford Chance

The Higher Administrative Court for the Land of North Rhine-Westphalia (OVG) confirmed on 5 February 2020 that Google's Gmail does not constitute an "electronic communications service" within the meaning of section 3 no. 24 German Telecommunications Act (Telekommunikationsgesetz, TKG) (OVG 13 A 17/16). The classification as an "electronic communications service" can have far-reaching implications for a company's compliance with data protection and other security requirements. The judgment of the OVG follows a judgement of the Court of Justice of the EU (CJEU) and ends a longstanding dispute between Google LLC and the Federal Republic of Germany.

Google operates an email service called "Gmail" which can be used to send and receive emails and data over the internet. For this purpose, Google uploads and receives data packets relating to the sent and received emails via its email servers. Based on this the German Federal Network Agency (Bundesnetzagentur, BNetzA)  classified Gmail as an provider of "electronic communications services" within the meaning of section 3 no. 24 TKG.

Obligations of an provider of "electronic communications services"

The TKG implements Directive 2002/21/EC and requires a provider of "electronic communications services" to register with the BNetzA. Moreover, a provider of "electronic communications services" is subject to a series of other obligations. It must: -

• take appropriate technical measures and other safeguards to protect its service against disruptions that would lead to significant impairment of telecommunications networks and services,
• control the risks to the security of those telecommunications networks and services.
• be obliged to cooperate with security authorities.

Dispute between Google and the Federal Republic of Germany

On 2 July 2012 BNetzA requested Google to notify its service, a request which was confirmed by a decision of the Administrative Court of Cologne. Google then appealed to the OVG which decided to stay the proceedings in 2018 and refer the case to the CJEU to decide as to whether web-based email services provided via the open internet - without providing internet access to the customers themselves - qualify as "electronic communications services" under the Directive 2002/21/EC.

Decision of the CJEU

The CJEU finally issued its judgement in June 2019 (C-193/18) and ruled that an "electronic communications service" according to Art. 2 lit c. Directive 2002/21/EC is

"a service normally provided for remuneration which consists wholly or mainly in the conveyance of signals on electronic communications networks, including telecommunications services and transmission services in networks used for broadcasting, but exclude services providing, or exercising editorial control over, content transmitted using electronic communications networks and services".

In a previous ruling (ECJ C-475/12UPC) the CJEU had already ruled that a service must involve the transmission of signals in order to be classified as an "electronic communications service". The fact that the transmission of signals is done by means of an infrastructure that does not belong to the respective service provider is of no relevance to the classification of the nature of the service. The relevant criterion is that the service provider is responsible vis-à-vis the end-users for transmission of the signal which ensures that they are supplied with the service to which they have subscribed.

Following this interpretation, the CJEU decided that, even if Google participates in the data transmission process, the Gmail service itself does not consist wholly or mainly in the conveyance of signals on electronic communications networks. It is the access providers - ISPs, telecoms operators etc - of the email users who are responsible for the transmission of signals necessary for the operation of Google's service. Even if Google benefits from their services, these providers and operators bear the responsibility.

Moreover, even the fact that Google also operates its own communications networks is not sufficient to classify Gmail as an "electronic communications service" with regard to its email service. Services related to the operation of Google's communications network must be regarded separately from Google's Gmail service.

Practical relevance for other companies

The decision of the OVG, which follows the decision of the CJEU, may provide relief for numerous german service providers. It can be applied to all over-the top (OTT) service providers that are structurally similar to Google's Gmail service, as the question, whether a service provider is to be classified as an "electronic communications service", now depends on who is responsible for the conveyance of signals.

In an earlier  CJEU, decision involving Sykpe (ECJ C 142/18)  the CJEU ruled that the provision of software which allows users to make calls from a terminal to a  fixed or mobile telephone line using the internet protocol (IP) and, more specifically, the technique called "Voice over IP" (VoIP) , which allows the user to call a fixed or mobile number in a national numbering plan from a terminal via the public switched telephone network (PSTN) of a Member State, is considered an "electronic communications service" within the meaning of the Directive 2002/21/EC. The deviating classification was caused by the possibility to use VoIP technology to call a fixed or mobile telephone via the public switched telephone network from a terminal device connected to the internet, such as a computer, smartphone or tablet. Skype Communications S.à. r.l. (Skype) technically enables the transmission of signals from the internet to the PSTN and ensures the VoIP service. Therefore, in contrast to Google, Skype bears the responsibility for the conveyance of signals related to its service.

What's next?

The interpretation of the definition of an "electronic communications service" contained in the Directive 2002/21/EC becomes clearer following this decision, and the judgement of the OVG creates more legal certainty for providers of comparable services.

However, this legal certainty might not last for long. The TKG, which implements the Directive 2002/21/EC into German law will be modified in the course of the implementation of the European Electronic Communications Code (Directive (EU) 2018/1972) (EECC). The EECC regulates electronic communications networks and services and must be implemented by the end of 2020. The definition of electronic communications services in Art. 2 No. 4 EECC also includes services "provided for remuneration via electronic communications networks". This definition also includes OTT-services. Predominant signal transmission is no longer relevant. A distinction is, however, still made between providers who are and those who are not connected to the public telephone network (Art. 2 No. 6 and 7 EECC).