Opinion: Is Ad blocking the next legal battleground?

Legal position on browser ad-blocking in New Zealand is likely to be influenced by what happens in the US

Consider these two facts: Fact 1: many of the world’s largest internet companies, including Google and Facebook, derive most of their revenue from serving up online advertisements.

Fact 2: one of the most popular browser add-ons is Adblock Plus, free software designed to eliminate online advertising from a user’s browser, with the Firefox version alone recording close to one million downloads per week.

You don’t need to be a financial guru to see the potential problem here. Could browser ad blocking one day become so prevalent that it jeopardises potentially billions of dollars of online ad revenue, and the primary business models of many online and new media businesses? If so, it will inevitably face legal attack.

The concept of browser ad blocking software is simple: when a user opens a web page, the software detects any advertisements included in the page and automatically removes them while leaving the rest of the page intact. The user gets to view just the content they wanted (for example, the article or page of search results) without being bothered by banner ads, sponsored links or other advertising. Other claimed benefits include faster loading pages, reduced bandwidth, and reduced tracking of surfing habits. There is little if any downside for the user, but a big potential downside for the website and its advertisers whose paid ads are silently zapped before being seen – and perhaps clicked on – by the user.

Currently, advertising-supported sites seem unperturbed. Google itself – the world’s largest online advertising provider – offers Chrome-versions of Adblock directly from its official Chrome Web Store (somewhat incongruously boasting that it can even block video ads from Google’s own YouTube site). And there seems little cause for concern at present: online advertising is thriving, which suggests that ad blocking is not, statistically, too widespread.

But what legal steps might be taken if browser ad blocking does reach a point where it is seen as a threat to bottom lines and business models?

The legal position

There does not appear to have been any court case to date involving browser ad blocking. This may be an indicator of the lack of concern or loss, or of the difficulty of such a legal challenge, however there have been some US legal battles involving other forms of ad blocking/skipping that help set the scene for future legal fights.

An early example arose in the famous US “Betamax case” proceedings of the late 1970s and early 1980s in which studios challenged the legality (under copyright law) of home video recorders. The studios claimed, in part, that “the commercial attractiveness of television broadcasts would be diminished because Betamax owners would use the pause button or fast-forward control to avoid viewing advertisements”.

The Court rejected that claim because, it said, the viewer must still receive and record the commercials and then “must fast-forward and, for the most part, guess as to when the commercial has passed”, a process which the Court said “may be too tedious”.

Fast-forward to 2002, when several US networks sued the maker of the ReplayTV DVR in part due to its commercial-skipping features, alleging that such technology “attacks the fundamental economic underpinnings of free television”. The case effectively ended after ReplayTV went into bankruptcy a short while later, so no legal precedent was set.

In a 2003 case involving file-sharing service Aimster, judge Richard Posner wrote that, based on earlier cases, commercial-skipping “amounted to creating an unauthorised derivative work … namely a commercial-free copy that would reduce the copyright owner’s income from his original programme, since ‘free’ television programmes are financed by the purchase of commercials by advertising”. However, commercial-skipping was not the focus of that case.

The issue was revived earlier this year, with CBS, Fox and NBC suing Dish Network over its commercial-skipping technology, saying they were doing so “in order to aggressively defend the future of free, over-the-air television”. The legal basis of (part of) the claim is, in essence, that commercial-skipping infringes copyright by modifying the broadcast stream presented to end users.

It is not a particularly big leap to apply those arguments to browser ad blocking.

Could a legal attack be launched on browser ad blocking?

Two areas of law that could potentially be used in efforts to attack the legality of browser ad-blocking are:

1. Copyright law: it could be claimed that ad blocking constitutes copyright infringement, by causing unauthorised modification to a web page (which in many cases will be protected by copyright) – that is, it creates an unauthorised adaptation of the page. As mentioned above, this has been the basis of television commercial-skipping lawsuits, and has received supportive comment from US courts.

2. Trade practices / commercial laws: it could be claimed that the use of third party software to remove paid advertising constitutes interference with contractual relations, eg an advertiser and a website have entered into a contract whereby the site will display an advertisement in return for a fee or commission, but this arrangement is being intentionally stymied by ad blocking software. Alternatively, it could be claimed that ad blocking software induces the breach of website terms and conditions that prohibit ad-blocking (if such a term is present, which currently is relatively rare).

Both of these scenarios have significant legal and practical challenges in the context of browser ad blocking, but are not inconceivable if the targets are the identifiable distributors of the ad blocking software or the maintainers who update “filter lists” that the blockers commonly rely on, as opposed to targeting end users. Likewise, if a browser distribution started to bundle and enable ad-blocking features by default, it could become a target for legal action.

Another possibility is specific regulation, where a law is passed that specifically bans the use or distribution of ad blocking software.

Similar precedent is found in laws banning the sale of digital rights management “circumvention devices” (ie in New Zealand, s 226A of the Copyright Act 1994 bans the sale or distribution of such devices in certain circumstances).

Notably, New Zealand’s law does not ban the private use of DRM circumvention devices. This partly reflects policy decisions about intellectual property and user rights, but also acknowledges the practical difficulty of banning private use of such devices.

It would be draconian, as well as practically impossible, to attempt to prevent users from carrying out their own ad-blocking. Attempts to prevent the creation or distribution of “filter lists” raises significant freedom of speech issues.

As with file sharing, legal and policy direction on browser ad-blocking in this country will likely be heavily influenced by what happens in the US in the coming years.

This article provides general information and does not constitute advice. Professional advice should be sought on specific matters.

Guy Burgess is a lawyer advising on commercial and IT law at Clendons barristers and solicitors, Auckland. He can be reached at guy.burgess@clendons.co.nz

27 Comments

Malcolm Stayner

1

Interesting. If the adoption of ad-blockers becomes widespread advertisers are less likely to place ads. This will result in the provision of less content (as revenues will fall) and the consumer will suffer. Sometimes, there is a trade-off to be had: you put up with the ads being shoved under your nose because you get better content. Wonder if market forces will sort this one out or whether it will be a fight to the death through the courts?

Anonymous

2

Though if they get ban in their current form could the blockers just work differently? Download and just not render? Draw a white box over the top? Make a custom version of Linux that can't display ads at an OS level "My system isn't capable of displaying your ad"

Jay Daley

3

A thoughtful and well researched article. Thanks.

Anonymous

4

Unauthorized adaptation would never fly as the rendering is left to the consumer. Just open a text browser in court and case closed.

Spr.

5

If Ad-Blocks are banned, I'll change the name of my product and give it away like that. Or go pirate. I doubt making it illegal would stop any one from not blocking advertising. We get enough of it everywhere else.

Mike

6

Surely advertisers are no worse off from ad skipping. The people who choose to block or skip ads are the people who are not interested in the ads, are not interested in buying those advertised products and services. Why would advertisers care?

Anonymous

7

Thinking about that argument of copyright infringement for modification of a web page, the web server is sending my browser a message. What I do with that message when I receive it is surely up to me...?

Anonymous

8

Interesting that advertisers would think they have a right to force me to look at their drivel. Where is my right to tell them to shove their ads up their arses?

hellonearthis

9

What if you get a malicious ad that results in your computer getting a virus. Would the site that displayed the offending item be libel for the costs for fixing or loss of data.

Anonymous

10

Nice article. If ad blockers are banned, I'l be suing for assault on my retinas. I'm sure I could do that and win my case the legal circus that is America.

Anonymous

11

The real reason for add-blocking are the intrusive and annoying adds, I don't have normally problem with the adds but I block adds because of few that are really annoying. Then if the adds companies really want the people to not do add-blocking, the best they can do is to don't make intrusive or annoying adds, and force the webpages that uses their service to not be add cluttered.

Richard

12

If a website owner wants to serve ads that badly, then rather than embedding images from a 3rd party, he should just serve them up inline himself. If the DNS matches, adblock can't block.

OTOH, I did once consider placing google ads on my site. The privacy implications for my users would have been hideous - google wanted to see the page content (even private messages of logged in users) each time it was dynamically generated, in order to decide what ad to serve. When I discovered this, we dropped the idea.

Khannea Suntzu

13

I can make a demand from certain people who express certain views to not so so in my freedom to consume information. For instance, as a consumer of online media and web sites I may express a preference to not be confronted with hate speech, certain religious statements, child porn. It is a small step as to define most type of adds as part of my preference not to be confronted with them. Freedom of expression is meaningless without an equivalent freedom to filter.

Anonymous

14

If they find someone crazy/silly enough to try, people will boycott the site. Low revenue from ads becomes zero revenue from ads, zero views, and loss of registered users.

I've already seen sites with ad block banners. Element blocking rules take care of those as well. There are the ones that block all content to people using ad blockers. See first sentence. I'd probably bet we see ToS pages to enter websites soon. Though, their legality is as questionable as this whole idea of governments enforcing for your investments.

Kevin T

15

Certainly many advertisers and agencies are still in 1970's marketing mode, force feeding up items we don't want through broadcast 'push' marketing.

Studies have confirmed most ignore website banner ads even if we don't use blocking software. Website banner ads provide the worst clickthough rates of any form of online promotions, but the old-school agencies that set these up clearly don't want their own clients to know this, treating banner ads the same way they sold display ads in newspapers and magazines in the 70s.

With Facebook pushing many more unwelcome ads in our faces these days, these adblocking tools are an essential part of making the online experience better. I'd even pay for a monthly subscription version that did a better job.

Now, if it was just as cheap to do it for TV ads, instead of having to buy a $500 recorder-player...

Anonymous

16

The direct marketing and targeted advertising industry is an extremely unethical one which has for decades exposed consumers to one inappropriate practice after another after another. Nearly all of which have significant negative consequences for privacy, especially the unsolicited targeted advertising forms. It isn't just the online ad networks but also the operators of websites that expose consumers to these unethical practices. Today, only a fool would NOT block advertisements and every person who does block them should hold their head up high. They are not only doing what is right for their own privacy and security but also opposing business practices that should not be rewarded.

This may very well come to an ugly head one day, so consumers must step up and play an even more active roll in fighting against our common enemy. Day in and day out they work to tighten their grip over our devices so that they may control what it is we do with them, what it is that we must see, who it is that we must pay, and so forth. They must not be allowed to continue to do this. You either fight for your right to control what your device does or you suffer the consequences.

Blinky the Hitman

17

My usercontent.css is ~38kb.

No ads, ever. No slowdown from extensions.

Bite me, adwhores.

Anonymous

18

You can blackhole about 90% of all advertisements by
pointing the worst of the adware sites at 127.0.0.1 by adding
them to your HOSTS file.

This won't help a few sites that do their own targeting
(and you will break a little functionality if you blackhole
google-analytics) but it's worth it in the long(er) run.

Anonymous

19

There's an active project on Kickstarter that wants to move the ad blocking out of you computer into a separate device that sits between the modem and the router. That gives you one place to manage the ad blocking (instead of with each browser and computer). And also blocks ads to browsers that don't support AdBlock (like those on Smartphones).

http://www.kickstarter.com/projects/600284081/adtrap-the-internet-is-yours-again

Alan Brown

20

Unlike TV or radio, internet users directly pay for their usage. So do website owners, but that doesn't make pushing advertising onto endusers any less a case of cost shifting.

This is why spam is such a problem. It costs the spammers almost nothing because 90% of the cost is in receiving and storing the messages.

As soon as outfit goes to court to force their advertising through, the cost shifting arguement will be raised - and there's plenty of precedent both here and in the USA to heavily restrict such activities.

FWIW, ad networks and adware vendors have already been trying this tactic, but staying under the radar for the most part. Spybot search and destroy removed detection of several adware programs after legal threats were made.

Peter

21

Look at the source code of a web page. That's all your browser sees. They're instructions for the browser to follow. Whether the browser chooses to follow them (or not) is up to the owner of the browser, not the entity supplying the web page.

Let's see the lawyers get around that one.

Anonymous

22

The original intent of the WWW was that the server offers a page and the user's browser renders the page in accordance with the limitations of the user's display device and in accordance with the user's wishes. For example, you can turn off all pictures if you are on a slow link, or maybe you are forced to because you have a text-mode terminal. This was the ORIGINAL DESIGN of the Web and I feel very offended that advertisers want to corrupt not only the content of the Web, but also the very idea on which it was founded.

It is very simple: Your server sends me a page. My browser renders it, using my options to guide it in that task. If you include flashing banners in the page, I am likely to tell the browser not to display them because they are irritating and use lots of CPU time.

Jiri Chomat

23

I think this won't be solved on the legal level - just like the TV, the flashing ads that people skip are going to be replaced by product placement and PR atricles, which can't be easily removed. This is going to happen at the point where the CTR of ads reaches a critical level where advertisers wouldn't want to advertise anymore.

rkl

24

Some sites already detect ad blockers and actually won't send the page until you turn them off. It's even happening on Android now - Adaway + SSHDroid fight against other for example. If you enable Adaway, SSHDroid (ad-supported free version) brings up a dialogue with "Revert", "Quit" or "Upgrade to Pro". Choosing "Revert" actually turns off the ad blocker and brings up ads again in SSHDroid. It might be how a lot of apps and Web sites behave in the future.

Anonymous

25

At this very moment I'm reading an article from a magazine I have not paid for. If I keep getting access to this site (as well as countless other news feeds) for free then I will use my built-in ad blocker - my brain!

Alan

26

Advertisers are taking users bandwidth without permission, pushing up their usage and in the case of mobile can cost a lot of money. If anything the advertisers should be the ones getting sued for theft of bandwidth without permission.

If I take bandwidth without permission from someone I'd get sued, it's time the advertisers did. It's not like a newspaper where the adverts are in the up front cost I pay, it's a hidden continuous cost.

John Snyder

27

Adblocking is actually good for publishers. It's true. For example if I get annoyed by too many ads I stop coming to a website. The website suffers from drop in visitors like me - their monthly active users numbers go down. If I remove all these annoyances I keep coming back, I even contribute to site by posting comments and stuff like I'm doing here now while browsing with an ad blocker.

Another point is that since I am not interested in ads why whould I waste the advertiser's network resources by downloading their banners that I will not click on. I mean - I'm sure there are many people who enjoy banners - so by me not downloading the banners I give those other people have a better experience since they will get their banners load faster.

Lastly - the click rate of advertisers will increase because by me not downloading the banners that I will not click on anyway the view counter is not incremented on the advertiser's end, so I am not diluting their click rate, so having higher click rate will allow publishers charge higher rates for advertising.

It's may sound counter-intuitive but when publishers and especially forums do benefit when people use ad blockers.

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