German Adblocking Ruling Said Important for Global Publishers, Advertisers

A German Supreme Court ruling that Eyeo GmbH's AdBlock Plus isn't anticompetitive will have "very tangible commercial implications" for online advertising and publishers of online content in the U.S. and elsewhere, Hogan Lovells (Hamburg) trademark and unfair competition attorney Anthonia Ghalamkarizadeh told us. The April 19 decision means Eyeo is free to continue marketing AdBlock Plus, by far the most popular and widespread adblocker in the world, she emailed. The service has rivals and faces opposition from publishers that are finding methods other than ads to fund their online content, she and others said.

The German high court joined several lower courts in saying AdBlock Plus "is just another brainchild of permissible online competition," Ghalamkarizadeh blogged. It said Eyeo merely wants to further its own legitimate commercial goals without affecting any technical barriers the plaintiff publishing house, Axel Springer, had to protect its content, she wrote. "Eyeo is basically free to continue with these practices as before, and now even can sell to its critics that it has the endorsement of the highest civil court in its home jurisdiction," she told us. If the service develops into a monopoly, the door would be open again for more lawsuits from publishers, she said.

The court endorsed the adblocking service regardless of the monetary program behind it, Ghalamkarizadeh blogged: Charging publishers and advertisers to be on a "white list" to receive preferential treatment makes the adblocker "commercially biased," which isn't in users' best interest. Eyeo has started cooperating with other adblocking services that use the white list, which seems to be on its way to becoming the industry standard, she told us.

The ruling "should prove once and for all that ad blocking is an inalienable user right," an Eyeo spokesman emailed. The company's "acceptable ads initiative" gives publishers the chance to recoup lost ad revenue while keeping users in the driver's seat because they can turn off the feature and block all promotions, he said. The whitelisting fee is needed because larger companies and ad networks require much more work to process (ad monitoring, reporting, relationship management and so on) than smaller ones, the spokesman said. It's free for 90 percent of whitelisters, he said. Independently curated criteria for acceptable ads must be met, he said.

The Coalition for Better Ads, launched in 2016, created a different standard for improving users' online experience. The group first did extensive consumer research to determine the ads consumers in North America and Europe found most disruptive and annoying -- which led to development of the Better Ads Standard announced in March 2017, a spokesman said. The research showed the formats consumers least preferred were associated with more use of adblockers and increased likelihood to leave a website, he emailed. Consumers differentiate between ad experiences and don't dislike all such marketing, he said. Coalition members include Google, Facebook, Microsoft, News Corp. and The Washington Post.

Eyeo sees "zero competition" from the CBA, the Eyeo spokesman said. The latter, "laudable as it is, blocks basically nothing compared to a normal ad blocker," he said. Another key difference between the services is that one of the voters on the CBA also serves to enforce the standard (Google enforces it via its Chrome browser), but neither AdBlock Plus nor any of the other adblockers that implement its standard have a say on what's considered acceptable. That's done by the "independent, cross-industry and nonprofit-represented Acceptable Ads Committee," he said.

Despite its popularity, there's some pushback against adblocking. A "cottage industry" has sprung up claiming to offer users "choice," said Eyeo's spokesman. "When they take off their sheep's clothing you'll find that what they actually offer is a way for publishers to circumvent user will by attempting to reinsert ads where users have chosen to block them." There are technical efforts to circumvent users, which "quickly devolve into a technological game of whack-a-mole with the greater open source ad-blocking community" which the latter will likely win, he said.

"Adblocking is a complex issue and not just about privacy," said European Publishers Council Executive Director Angela Mills Wade. Research suggests many consumers download blockers for varying reasons, including to speed up their connections and minimize mobile data usage, she emailed. Others worry about protecting privacy and minimizing data collection for the purpose of targeted ads, she said. Some find certain kinds of ad formats annoying or intrusive, she said: The "problem with ad blockers is that once installed they don't differentiate between sites that don't serve intrusive ad formats like premium news media sites, and those that do."

Publishers want readers' experiences to be as satisfying as possible, including viewing ads, said Mills Wade. Ad revenue is "an essential component" of the news publishing business and publishers should be free to interact directly with readers to explain why they would like them to whitelist their particular site in return for clarity about how data will be used, and for providing access to a broad range of content without having to buy a subscription, she said.

Some German publishing sites are denying access to users with blockers, including the Financial Times, along with an alliance of 80 percent of the top French news publishers, said Ghalamkarizadeh. Many other internet publications are resorting to paywalls to avoid dependency on ad revenue, she said. A March 2017 eMarketer report on ad blocking in the U.S. estimated a quarter of U.S. internet users used blockers at the end of 2016, mostly on computers rather than smartphones. That is likely to jump to three in 10 internet users by year's end, it said.