OTT VoIP Calling Apps are Telecom Services under EU Law

Telephone calling apps, such as Skype, Viber and Google Hangouts, are subject to European telecom regulation, the European Court of Justice has ruled. Such services may now be required to comply with EU obligations that apply to traditional telephone services, such as registration, privacy, consumer protection and law enforcement access to user communications.

In other countries (notably the US), voice-over-IP (VoIP) services that allow calls to be made to telephone numbers but are not used to receive them are not subject to telecom regulations or are very lightly regulated.

Court’s Analysis

In a long-running dispute, the Belgian telecom regulator BIPT has sought Skype to register as a provider of a regulated telecom service – an “electronic communications service” under the EU’s telecom regulatory framework – with respect to its SkypeOut feature for making telephone calls.

Skype has argued that it only provides a software application that relies on an internet access connection to make calls to telephone numbers. Because internet service providers and other third parties are responsible for transmitting calls made by users of its software, Skype believes it does not offer a communications service itself, and internet access and telecom operators provide the underlying transmission services that are subject to telecom regulation.

When the dispute reached the courts, the European Court of Justice was asked to rule on whether VoIP calling apps fit within the definition of an “electronic communications service” under EU law.

In its decision, the ECJ found that SkypeOut was a regulated communications service because Skype assumes responsibility for transmitting calls to telephone numbers: it charges customers for making calls and enters into agreements with telecom service providers to terminate calls. Skype’s appeal will now return to the Belgian appellate court for a final ruling.

Implications

The court’s decision may mean that VoIP calling apps that provide paid services to EU customers will need to comply with telecom law earlier than anticipated.

Last December, the EU extended telecom regulations to “over the top” (OTT) communications services, including VoIP calling apps. In the EU’s new telecom code, the definition of “electronic communications service” has been expanded to include any interpersonal communications services provided over the internet, including VoIP services, messaging apps and email services that do not use telephone numbers. However, the new definition does not take effect until December 2020.

A range of regulations could apply to VoIP calling apps. In addition to registering with regulators, telecom providers in Europe face additional privacy, security and consumer protection requirements as well as obligations to provide real-time interception and stored communications data. Specific requirements will depend on how regulators interpret the requirements and national governments ultimately implement the new telecom code.

The court’s decision also has implications beyond telephone calling apps as it removes doubt that internet-based services can be within the scope of telecom regulation. By emphasizing the existence of agreements with telecom carriers as a trigger for telecom regulation, the ruling provides support for the extension of regulation to a variety of cloud-based services that charge users for communications features.

Separately, the ECJ is considering whether email services such as Gmail are considered an “electronic communications service” subject to telecom regulations. A ruling in that case may further expand the scope of regulated services.