Out-Law / Your Daily Need-To-Know

German authority clarifies when connected car services are considered telecommunications

Out-Law Analysis | 06 Oct 2022 | 11:32 am | 2 min. read

Germany’s Federal Network Agency has clarified when car manufacturers and other manufacturers of products incorporating machine-to-machine (M2M) communication will fall under the German Telecommunications Act.

M2M communication refers to the automated exchange of information between different devices. M2M communication is used, among other things, in vehicles, especially for so-called connected car services - for example, navigation with real-time data or music streaming. M2M communication is also needed for autonomous driving and will therefore gain in importance in future.

Appt Stephan

Dr. Stephan Appt, LL.M.

Rechtsanwalt, Partner, Head of Diversified Industrial and German TMT

Until now, it has been disputed whether and in which cases car manufacturers producing vehicles with M2M services should be regarded as providers of telecommunications services and thus fall under the Telecommunications Act.

But M2M services can only work with a mobile radio connection. Manufacturers therefore regularly cooperate with mobile phone providers who provide the radio connection (connectivity). Usually, the manufacturer and the mobile phone provider conclude a contract among themselves, the SIM card is then installed in the respective vehicle and enables the M2M functions of the vehicle. There is also a separate contract between the manufacturer and the customer for the use of the services, but there is usually no contract between the mobile phone provider and the customer.

Until now, it has been disputed whether and in which cases car manufacturers producing vehicles with M2M services should be regarded as providers of telecommunications services and thus fall under the Telecommunications Act (TKG). A communication [available only in German] from the Federal Network Agency (BNetzA) from 9 August 2022 provides at least some clarity on how the competent authority classifies M2M communication: According to the BNetzA, M2M communication is not in itself a telecommunications service. Thus, manufacturers of vehicles with M2M services that merely establish a radio connection "directly between a car and its environment or between different cars" are in principle not providers of telecommunications services and do not fall under the TKG. It is true that the signal transmission underlying M2M communication constitutes a telecommunications service. However, this is provided by the mobile network operator, which makes the signal transmission available to the car manufacturer as its main service for the latter to base its M2M applications on it and sell them to the end customer. According to the BNetzA, signal transmission is therefore not a telecommunications service provided by the car manufacturer.

The BNetzA therefore assumes that manufacturers themselves are not covered by the TKG, but only mobile providers. This is because connectivity is not an essential part of the contract in the relationship between manufacturer and customer, and the customer is not charged for the connectivity. However, if internet access or interpersonal telecommunication services such as telephony are also offered via the vehicle, the BNetzA assumes that the manufacturer is a telecommunication service provider.

Dr. Benedikt Beierle

Dr. Benedikt Beierle

Rechtsanwalt

Manufacturers not wanting to fall under the TKG can offer connected car services, but should be particularly vigilant in drafting the contracts between the manufacturer and the mobile phone provider as well as the manufacturer and the customer.

If manufacturers are classified as telecommunications service providers, they must fulfil additional requirements. Among others, providers of publicly available telecommunications services are required to register and there are special provisions for customer protection. In addition, the TKG places special public safety requirements on telecommunications service providers, including some mandatory technical and organisational protective measures. Manufacturers usually try to avoid this form of regulation by the BNetzA.

This means that manufacturers not wanting to fall under the TKG can offer connected car services, but should be particularly vigilant in drafting the contracts between the manufacturer and the mobile phone provider as well as the manufacturer and the customer. In addition, manufacturers should generally avoid offering internet access services and interpersonal telecommunication services such as telephony if they do not want to be covered by the TKG. An alternative in these cases is that the customer obtains internet access connectivity and any interpersonal telecom services directly from a telecom provider.

Future of mobility
The way we move is changing radically – climate change, superfast telecoms networks, electrification, AI and digital payments are rewriting the transport rulebook. Autonomous and shared vehicles and mobility as a service are fast becoming a reality.
Future of mobility
We are processing your request. \n Thank you for your patience. An unknown error occurred, please input and try again.