Vodafone caught by €534m mobile fine

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The Independent Online

SFR, the French mobile company in which Vodafone owns a 44 per cent stake, and two other mobile groups have been fined a record €534m (£362m) by French competition authorities for market collusion. SFR, France Telecom, the owner of Orange, and Bouygues Telecom, face being sued by consumers for up to twice as much again in damages.

The Competition Council fined Orange €256m, Bouygues Telecom €58m, and SFR, majority controlled by Vivendi Universal, €220m. It found the three had exchanged confidential information monthly from 1997 to 2003 about the number of clients won and cancellations experienced.

During the time in question, the three were the only mobile phone operators in France and as of June this year still controlled 99 per cent of the market, despite the liberalisation of the French telecoms market in July 2003. The council said: "While the discussions did not concern the price decisions they were to take, the exchange of information was of such a nature it reduced the intensity of competition on the mobile telecommunications market." The information reduced uncertainty for the three about their corporate strategy, it added.

UFC-Que Choisir, the consumer lobby group that lodged the complaint, estimated consumers had suffered €1.2bn damage and have pledged to launch a class action against the three, who deny the allegations of market collusion and said yesterday they would appeal against the decision.

SFR said the fine was out of proportion compared with others imposed by the council in similar situations. Orange said: "The ruling, based on events long past, has been handed down despite months of actions of all kinds seeking to discredit the telecommunications sector in France."