The Competition Appeal Tribunal (CAT) has today dismissed a £1.3bn class action claim by the Collective Action on Land Lines (CALL) campaign against national broadband ISP and phone provider BT, which alleged that the UK telecoms giant had overcharged 2.3 million of its landline-only phone customers between 2015 and 2018.
Just to recap. The original claim was first raised at the start of 2021 through UK law firm Mishcon de Reya, which was acting on behalf of a former Ofcom telecoms consultant – Justin Le Patourel. At issue was Ofcom’s 2016/17 review of the narrowband market (here and here), which found that landline-only customers (i.e. those who didn’t take a cheaper broadband bundle) had been “getting poor value for money compared to those who buy bundles of landline, broadband and/or pay-TV services.”
NOTE: The case also sought compensation for customers who took both a broadband service and a BT landline, albeit not together as a bundle (i.e. customers paid more for the individual services).
The review also found that customer bills for line rental had risen significantly since 2009, while at the same time BT’s costs (wholesale) for providing the service had fallen. But this did seem to ignore the fall in calling volumes that hit related revenues (other linked costs may have also been excluded) – a key weighting factor for operators when setting retail prices.
Nevertheless, Ofcom put pressure on BT to respond, and the operator did so in 2018 by voluntarily cutting the line rental charge for c.900,000 vulnerable landline-only customers (reduction of £7 per month), while at the same time capping any subsequent overall increases to line rental and call charges to inflation (here) – this was extended again in 2020 for another 5 years (here).
The Collective Action on Land Lines (CALL) campaign used much of this as the basis for their wider claim, which finally went to trial at the start of 2024. In theory, a victory for Justin Le Patourel might have forced BT to pay out up to £1.3bn in compensation to consumers (largely because CALL had won approval to represent all of BT’s allegedly affected customers, unless they decide to opt out), although such headline figures are often optimistic.
The Verdict
After nearly four years of battling, the CAT today handed down their judgement and dismissed the claim. Naturally, retail broadband ISPs and phone providers ultimately have the freedom to set pricing however they so choose, albeit often restricted by the realities of natural competition (i.e. making your service too expensive or too cheap can be counter-productive). But this is less relevant where cases involving the Competition Act and dominant players are concerned. The CAT “found that BT was dominant” in the SFV market, but the judge ruled that their pricing was “not unfair“.
CAT’s Judgement
Overall, we considered that, whether taken by itself or in comparison with other prices, BT’s prices were not unfair, and therefore there was no abuse of dominant position. This meant that the CR’s claim failed.
BT’s Statement
Today the Competition Appeal Tribunal (“CAT”) handed down its judgment in the case of Justin Le Patourel v BT Group plc (“BT Group”) in which the CAT has dismissed the claim and found that BT Group’s conduct did not breach competition law. We take our responsibilities to all of our customers very seriously and welcome today’s ruling.
The judge stressed that “just because a price is excessive does not mean that it was also unfair“. The CAT took into account, first, that while BT’s prices were excessive, they were also “radically less than the excess relied upon by [Justin Le Patourel]. This meant that the weight of the excess going forward into the unfairness analysis reduced.”
The CAT also considered that BT provided “distinctive value” to its Standalone Fixed Voice (SFV) customers such that its price “bore a reasonable relation to value“. Value here was found, not just in terms of particular features or “Gives” provided to the customers, but also in BT’s brand value as a whole.
Breaking news.. more to follow..
