German publishers have failed to prevent their users blocking ads on their sites after court officials ruled that the software was not anti-competitive.
The failed lawsuit from German publishers RTL and ProSiebenSat1 was against Eyeo, the parent company of popular ad-blocker AdBlock Plus, which operates an “acceptable ads” whitelist that larger sites have to abide by strict standards and sometimes pay steep fees to appear on.
A spokesperson for the court confirmed the ruling to the Guardian this afternoon and in a statement said that the AdBlock Plus software “was not anti-competitive” because users choose to install the software and that it is not yet big enough to have a neglible impact on the money they make from ads.
In an emailed statement Eyeo said: “We are elated at the decision reached today by the Munich court, which is another win for every Internet user. It confirms each individual’s right to block annoying ads, protect their privacy and, by extension, determine his or her own internet experience. This time it also confirms the legitimacy of our Acceptable Ads initiative as a compromise in the often contentious and rarely progressive world of online advertising.”
It is Eyeo’s second victory over media owners in as many months and the fourth time it has batted away legal challenges to its offering. Last month’s challenge, which was mounted by German publishers Zeit Online and Handelsblatt, appears to have set a precedent with the outcome bearing striking similarities to today’s ruling. Greater clarification will be provided once another lawsuit against Eyeo from Axel Springer, the owner of the country’s largest newspaper Bild, is resolved.
The spate of lawsuits reflect the potential threat ad blocking could pose to those media owners reliant on advertising to drive their revenues should it become more widespread. The number of people with ad blockers jumped 70 per cent year-on-year in 2014, according to PageFair and Adobe, while Adblock Plus claims to have 50 million active users. Both figures will likely rise further this year now that Adblock Plus is being tested on Android devices ahead of a full scale rollout.
The failed lawsuits and moves to boost the reach of ad blockers are a blow for media owners like Google. The online business along with peers Amazon and Microsoft have all paid Eyeo to stop blocking ads on their sites, while several European mobile operators are reportedly poised to block advertising on their networks.
It all points to a key role for ad blocking services in the tussle for dominance of advertising revenues between publishers and technology companies. Online advertising was worth $141.2bn globally in 2014, so it’s clear why the prospect of more people blocking ads with services such as Eyeo and mobile blocker Shine has ruffled the industry.
Richard Eyre, Chairman of IAB UK, wrote in a blog post today that ad blocking, particularly on mobile, can only be managed through “effective partnerships” involving all parties. His cited research from the IAB and YouGov which reveals that the level people would pay if the ads went away could not possibly support the quality of services they have come to expect for ‘free’.
“Advertising is the currency of the web. People don't much like paying for anything, but advertising is very clearly preferred to any other form of transaction,” he continued. “Our research says people would pay on average 88p a month for social media and £1.33 per month for search.
“[Advertising] supports an ecosystem that works for creators of content and services and for users, hence the £7bn spent last year in the UK alone on internet platforms, £1.6bn of that on mobile devices. Advertising is also the simple mechanic that encourages innovation, as new entrants can safely count on earning ad revenues for a product people like.”