Yahoo Finance Major UK mobile networks hit with £3bn competition class action
Four of the UK’s largest mobile network operators have been hit with a class action lawsuit, over allegations they used market dominance to overcharge customers.
The class action was filed to the Competition Appeal Tribunal (CAT) against Vodafone, EE, Three, and O2.
The case alleges that the companies have been abusing their dominant positions in the UK mobile industry by charging a ‘loyalty penalty,’ in which long standing customers were overcharged for handsets beyond the end of their contractual term.
The claim alleges the mobile operators have overcharged on 28.2 m contracts, which is why it is seeking damages of at least £3.3bn.
The case follows a rare super-complaint from Citizens Advice to the Competition and Markets Authority (CMA) in September 2018. At the time, the CMA found that: “We do not consider that providers should continue to charge customers the same rate once they have effectively paid off their handsets at the end of the minimum contract period. This is unfair and must be stopped.” They also added that customers “rightly feel ripped off, let down and frustrated”.
The claimants have calculated that, if successful, those affected could receive as £1,823 each.
Law firm Charles Lyndon filed the case, which it has instructed consumer rights champion Justin Gutmann to be the face of the opt-out proceedings.
Gutmann is a notable face at CAT and is leading the £768m class action case against Apple and the £73m class action against rail giant Govia Thameslink Railway.
A spokesperson for O2 stated: “To date there has been no contact with our legal team on this claim. However, we are proud to have been the first provider to have launched split contracts a decade ago which automatically and fully reduce customers’ bills once they’ve paid off their handset. We’ve long been calling for an end to the “smartphone swindle” and for other mobile operators to stop the pernicious practice of charging their customers for phones they already own.”
A Vodafone spokesperson said: “This has just been brought to our attention and we don’t yet have sufficient detail for our legal team to assess.”
While a spokesperson for EE noted: “ We strongly disagree with the speculative claim being brought against us. EE offers a range of tariffs and a robust process for dealing with end of contract notifications. The UK mobile market is highly competitive space with some of the lowest pricing across Europe.
Three has yet to respond when contacted for comment.
