UK's biggest mobile companies face multi-billion-pound lawsuit, here's why
Britain’s largest mobile network providers are facing a £3.2 billion ($4.29 billion) lawsuit for allegedly overcharging millions of loyal customers, after a London tribunal ruled on Friday (November 14) that a significant portion of the case can proceed to trial. Vodafone , BT's EE, Telefonica's O2 and Hutchison's Three UK – whose $19 billion merger with Vodafone was approved last year – are accused of imposing a “loyalty penalty” on customers who remained with their networks after minimum contract periods expired.
Lawsuit alleges ‘loyal penalty’
The Competition Appeal Tribunal (CAT) certified that claims for losses from October 2015 onward can proceed to trial, while throwing out earlier claims as having been brought too late, according to a report by news agency Reuters.
Lawyers representing British consumer champion Justin Gutmann allege the networks continued charging millions of customers for mobile devices that had already been paid off after their initial contracts ended. The practice effectively penalised loyal customers who chose not to switch providers once their minimum contract terms expired.
“The networks charged millions of British consumers who remained with the network after their minimum contract expired a 'loyal penalty,' by continuing to charge for mobile devices which had already been paid off,” Gutmann's legal team argued.
Telecom giants deny wrongdoing
The mobile providers have contested the allegations, with their lawyers arguing the lawsuit is fundamentally flawed as it alleges anti-competitive behaviour “in an industry renowned for its competitiveness.”
EE said that it does not accept the substantive allegations and intends to defend them robustly.
“We do not accept the substantive allegations of the claim and intend to defend them robustly,” an EE spokesperson said.
O2 welcomed the tribunal's decision to reduce the scope of the claim by excluding pre-October 2015 losses.
“We maintain that there is no merit to Mr Gutmann's case for the remaining period and will continue to robustly defend our position as it proceeds,” an O2 spokesperson stated.
Lawsuit alleges ‘loyal penalty’
The Competition Appeal Tribunal (CAT) certified that claims for losses from October 2015 onward can proceed to trial, while throwing out earlier claims as having been brought too late, according to a report by news agency Reuters.
Lawyers representing British consumer champion Justin Gutmann allege the networks continued charging millions of customers for mobile devices that had already been paid off after their initial contracts ended. The practice effectively penalised loyal customers who chose not to switch providers once their minimum contract terms expired.
“The networks charged millions of British consumers who remained with the network after their minimum contract expired a 'loyal penalty,' by continuing to charge for mobile devices which had already been paid off,” Gutmann's legal team argued.
Telecom giants deny wrongdoing
The mobile providers have contested the allegations, with their lawyers arguing the lawsuit is fundamentally flawed as it alleges anti-competitive behaviour “in an industry renowned for its competitiveness.”
EE said that it does not accept the substantive allegations and intends to defend them robustly.
“We do not accept the substantive allegations of the claim and intend to defend them robustly,” an EE spokesperson said.
O2 welcomed the tribunal's decision to reduce the scope of the claim by excluding pre-October 2015 losses.
“We maintain that there is no merit to Mr Gutmann's case for the remaining period and will continue to robustly defend our position as it proceeds,” an O2 spokesperson stated.
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