High Court refuses injunction in “net neutrality” case

20/11/15

On 17 November 2015 Mr N Lavender QC (sitting as a Judge of the Chancery Division) dismissed an application for an interim injunction against a ‘Block’ preventing access to Lebara’s websites over Lycamobile’s mobile network, including a recently launched VoIP service (“Lebara Talk”) that allows users to make calls over their data connection (Lebara Mobile Ltd v Lycamobile UK Ltd [2015] EWHC 3318 (Ch)).

Lyca’s primary justification for the Block was that Lebara Talk would divert voice call revenue from Lyca to Lebara, allowing Lebara to free-ride on Lyca’s infrastructure.

Lebara’s pleaded claim comprises 27 causes of action across five jurisdictions (the UK, France, Germany, Italy and the Netherlands). The claims include breach of the E-Privacy Regulations, unlawful means conspiracy, breach of confidence, deceit, breach of the Consumer Protection from Unfair Trading Regulations and breach of contract.

In an unusually lengthy judgment for an interim application, Deputy Judge Lavender held that a number of Lebara’s claims raised a serious issue to be tried. However, he found that any harm to Lebara was likely to be minimal because (i) only a modest proportion of Lyca customers own Apple or Android smartphones, which are the only platforms which Lebara Talk operates on; and (ii) users are still able to access Lebara content in other ways, such as on a desktop computer or a mobile device over WiFi. The balance of convenience therefore favoured not granting the injunction, subject to an undertaking that the Block would be limited to Lebara Talk.

The judgment contains a helpful analysis of the proper approach to considering applications for mandatory interim injunctions in light of Lord Hoffmann’s Privy Council judgment in National Commercial Bank of Jamaica v. Olint Corpn [2009] 1 WLR 1405, as well as comments on the ‘presumption of similarity’ between UK and foreign law in claims based on breaches of EU directives.

The case also raises broader issues about the forthcoming EU “net neutrality” regulation, which will place restrictions on internet access providers’ ability to manage web traffic. The regulation will come into force in April 2016.

The judgment is available here.