The new German Telecommunications Act: How does customer protection change?

A fully modernised Telecommunications Act (Telekommunikationsgesetz, TKG) has come into force on 1 December 2021. It implements the requirements of the European Electronic Communications Code (Directive (EU) 2018/1972). The new TKG contains numerous changes and new features, especially on customer protection – some of which are unusual (e.g. regulations on flat-rate compensation by providers), but support the full harmonisation of customer protection throughout the EU under telecommunications law, as intended by the EU legislator.

Main new regulations for customer protection

In the following, we provide an overview of significant changes in the field of telecommunications customer protection.

New requirements to provide information when entering into contracts

From now on, telecommunications providers are required to give residential customers (i.e. “consumers”) specific information on their rights under telecommunications law before consumers submit their declaration to enter into the contract (Sec. 55 (1) and (2) TKG). In addition, before submitting their contract declaration, consumers must be provided with a clear and easily understandable summary of the service contract (Sec. 54 (3) TKG). The European Commission has developed a template for this purpose (see here). After receiving the summary, consumers must approve the contract in writing to make it valid (Sec. 54 (3) sentences 4 and 5 TKG). The aim is to protect consumers especially from entering into contracts too hastily over the phone.

Contract term, renewal and amendment

Despite suggestions to do so, the legislator has not restricted the initial contract term, meaning that the term can still be up to 24 months. However, the new TKG requires telecommunications providers from now on to also offer consumers a contract with a term of 12 months (Sec. 56 (1) sentences 1 and 2 TKG).

In addition, the new Act makes it harder for providers to automatically renew contracts and easier for consumers to cancel them. Telecommunications providers have to inform end users in good time and comprehensively before a contract is tacitly renewed (Sec. 56 (3) sentence 2 TKG). End users may now cancel contracts that have been tacitly renewed after the minimum term at any time with one month’s notice (Sec. 56 (3) sentence 1 TKG). This means that automatic renewals laid down in the T&Cs, which only allow for cancellation of the contract after one year, are invalid.

Also, end users can cancel contracts without notice and at no cost if telecommunications providers change them unilaterally (Sec. 57 (1) sentence 1 TKG). Contract amendments have to be communicated to end users at least one month in advance and a maximum of two months before the intended amendments come into effect.

Faults and flat-rate compensation

The new TKG is also intended to create new regulatory incentives to expand network capacity: telecommunications providers now have to document all fault reports for consumers without undue delay (Sec. 58 (2) sentence 1 TKG). If the fault is not cleared within two calendar days of receiving the fault report, consumers can request flat-rate compensation for each day of complete downtime, starting from the following day, unless consumers are responsible for the fault or there is a case of force majeure. The compensation on the third and fourth day is EUR 5 or 10%, and from the fifth day, EUR 10 or 20% of the monthly service fee (Sec. 58 (3) sentences 1 and 2 TKG).

Reduction or cancellation in case of slow internet access

Consumers may now reduce the monthly fee or cancel the contract without notice if there is a significant, continuous or regularly recurring divergence in speed between the actual and contractually agreed performance (Sec. 57 (4) sentence 1 TKG). The German regulator (Bundesnetzagentur, BNetzA) has defined specifically when such a divergence can be assumed (General Administrative Order No 99/2021 1; available in German here). Since 13 December 2021, end users have been able to use a special tool provided by BNetzA to check their internet speed (see here, in German).

Missed customer service or installation appointments

The new TKG also requires telecommunications providers to document agreements on customer service and installation appointments for consumers without delay in each case (Sec. 58 (2) sentence 1 TKG). If providers miss one or more scheduled appointments, consumers can request compensation for each missed appointment of EUR 10 or 20% of the monthly service fee, unless the consumer is responsible for the missed appointment (Sec. 58 (4) TKG). The aim of the legislation is to improve customer service in general.

Change of provider, moving house and flat-rate compensation

While the new TKG essentially retains the requirement that former providers must ensure that end users’ service is not disrupted when they switch providers (Sec. 59 (2) sentence 1 TKG), in this case, too, the legislator now uses a flat-rate compensation: If a connection is interrupted for more than one working day, end users can demand compensation from former providers. This amounts to EUR 10 for each additional working day of downtime or 20% of the monthly fee unless consumers are responsible for the delay (Sec. 59 (4) sentence 1 TKG). When switching providers, end users are also entitled to flat-rate compensation if the former or new provider misses customer service or installation appointments (Sec. 59 (4) sentence 2 TKG).

Consumers’ rights on moving houses also remain unchanged. If consumers move houses and want to continue their contract, providers have to provide the contractual service without changing the terms or content of the contract if they can provide their services at the new location (Sec. 60 (1) sentence 1 TKG). Otherwise, consumers can cancel the contract with one month’s notice (Sec. 60 (2) sentence 1 TKG). Here again, the new TKG introduces flat-rate compensation if telecommunications service at the consumer’s new home is not activated on time (Sec. 60 (3) sentence 2 TKG).

Internet connection blocked for late payment

If consumers are at least EUR 100 (previously EUR 75) in default with payment, providers can block their internet access after a written warning (Sec. 61 (4) sentences 1 and 2 TKG). The same applies when there is reasonable suspicion of misuse (Sec. 61 (5) TKG). The block must be limited to services affected by payment default or misuse (Sec. 61 (6) sentence 1 TKG) and may only be maintained for the duration of the reason for blocking (Sec. 61 (7) TKG). In certain circumstances, providers still have to deliver a minimum level of broadband internet access services despite the block (Sec. 61 (6) sentence 2 TKG).

Conclusion

The new TKG creates new regulatory requirements and changes existing requirements. The amendments specifically strengthen the rights of end users and consumers in the field of customer protection, especially by introducing easier rights of cancellation and price reduction, stricter obligations to provide information and rights to flat-rate compensation. The legislator has also transferred some especially practice-relevant aspects to the regulator for further specification.

All providers of telecommunications services (e.g. via OTT, satellite, landline, or mobile) are required to check what action they need to take to implement the new statutory requirements.