What Axel Springer’s loss in ad-blocking suit means for UK publishers
Despite some dogged persistence, publishing giant Axel Springer lost its appeal in a suit against Adblock Plus in German courts earlier this week but extracted a very small consolation prize.
Axel Springer sued Eyeo-owned Adblock Plus last year, saying that no company should be able to interfere with the display of ads. The publisher lost its case last year, decided to appeal and lost again this week. But while the Cologne regional court found that ad blockers are indeed legal, a claim repeatedly disputed by the publisher, it forced Adblock Plus to place Axel Springer on a white list for no charge.
Under the ad blocking company’s contentious revenue model, large publishers — those with over 10 million monthly global impressions — can pay Adblock Plus to be on its acceptable ads initiative, and it will let through ads to users as long as they comply with certain criteria, like being non-intrusive.
Only 10 percent of the publishing companies on the Adblock Plus white list qualify as large companies — smaller companies are exempt from paying — and as such they are charged a licensing fee of 30 percent of what the additional revenue from whitelisting the ads will make them. Google, Microsoft and Amazon pay out sums to let ads through, but Axel Springer has previously refused, calling the practice extortionary. There are potentially millions of Euros at stake, according to Steve Chester, director of data and industry programs at the IAB U.K., who has been in talks with the ad blocking company.
“The industry needs to be more creative in finding alternative revenue streams, but Adblock Plus is fixed in its own revenue model. It’s ironic that now it may have to find other ways to make money,” said Chester. “I would be very surprised if these other publishers in Germany don’t try and appeal under the same circumstances.”
Axel Springer is one of five German media companies that have taken Adblock Plus to court, alongside ProSieben, Zeit Online, Handelsblatt and RTL, while it didn’t end well for the publishers, this gives a new hope. Germany is somewhat immunized against ad blocking companies due to its competition laws, a European directive that was tweaked in December 2015 by Germany to protect companies from others’ aggressive business tactics, (full records of the court ruling have not yet been released).
In the U.K., no analogous law exists, according to Eitan Jankelewitz, digital media lawyer at Sheridans, who points out the U.K. regulator, the Information Commissioner’s Office, enforces rules in a much more relaxed way than its European counterparts.
“It’s encouraging, but there’s no direct benefit for U.K. publishers,” said Jankelewitz. “It’s not like suing someone in a commercial sense, where nine out of 10 cases settle because that’s what people want. It does show that the courtroom has a better understanding of the pressures that publishers are under.”
However, having the money to go through multiple legal battles is one thing, but finding enough of a legal basis to take on an ad blocking company is another, and can also hold back publishers.
“In my opinion, I don’t sense that there is widespread support for legal action against Adblock Plus, nor even what legal framework that would be under,” said Piers North, strategy director at Trinity Mirror, which has been experimenting with anti-ad-blocking messages on regional titles.
The sentiment is echoed by Angela Mills Wade, executive director of the European Publishers Council. However, the ruling, she said, does “set a very important differentiation of what consumers do of their own free will and what companies do. It recognizes the inequity of what Adblock Plus is doing, which is capitalizing on consumer free will and behavior for their own commercial purposes.”
More in Media
Adalytics Research asks, ‘Are YouTube advertisers inadvertently harvesting data from millions of children?’
Publishers’ Q2 earnings reveal digital advertising is still in a tight spot, but digital subscriptions are picking up steam.
Experts reflect how the failures of social media and online advertising can help the industry improve the next era of innovation.
Ad position: web_bfu