“Illegal collusion” of mobile phone groups has led to the demise of Phones 4U, the High Court has said

The UK’s largest mobile phone network operators have violated antitrust law and illegally “cooperated” with each other to take part in the “destruction” of retailer Phones 4U, which went into administration in 2014, it was claimed in the High Court.

The administrators of Phones 4U (P4U) have filed a lawsuit in the High Court against five mobile phone operators – EE, Deutsche Telekom, Orange, Vodafone and Telefónica – which began on Monday.

P4U claims an extensive conspiracy in which executives at different companies collaborated to get rid of it. It claims that decisions by all mobile operators to withdraw from supply chain in September 2014 were the result of illegal coordination between them rather than independent decision-making.

The mobile operators strongly deny the allegations and defend the case.

Kenneth MacLean QC, representing P4U, claimed on Monday that all mobile network operators (MNOs) had a “massive incentive” to reduce volumes of business done with P4U due to low profit margins in the UK market.

“But they could not achieve these goals unilaterally. It would only happen if the MNOs cooperated. And that was illegal,” he said in his written arguments, adding that “senior executives appear to be lax in considering or participating in violations of competition law “.

MacLean asserted that there is a “culture of collusion” and that “conversations between senior executives have taken place safely in the knowledge that they will not be reported to the authorities,” he said.

“Unsurprisingly, in an industry riddled with inappropriate and illegal behavior, there have been multiple contacts at different times between MNO staff at different levels,” he said, adding that the defendants made “significant efforts to obscure, not preserve or not preserve.” material ”.

In his written arguments, MacLean noted one “amazing exchange” in April 2014, where an Orange executive sent a text message to a Vodafone manager seeking to arrange a “secure call with both of us using a new prepaid number.” [that is, a so-called burner phone]”. The Vodafone executive said he was “not comfortable” with this arrangement and there is no suggestion that such a conversation took place.

Deutsche Telekom said in its written arguments to the lawsuit that P4U’s case was “simply hopeless” and that there was “no direct evidence that DT was engaged in any collusive contacts with other companies”. DT added that the claim was “opportunistic” and claimed that P4U was seeking to “shift the blame for its demise” to the mobile operators “when the simple fact is that P4U was dried up by its private shareholders”.

Mark Hoskins QC, acting for Telefónica de España, stated in written arguments to the trial that the evidence in the case showed that there was no collusion and that the case should be dismissed.

Orange has denied allegations that it engaged in collusive or anti-competitive conduct or committed or obtained any breach of contract. “Orange will continue to strongly defend itself against the allegations made by P4U,” it said in a statement.

EE said in its written arguments to the lawsuit that P4U’s claim was “without merit” and the evidence shows that EE’s decision to leave P4U “was not part of a conspiracy. It was a unilateral decision that made good business sense.”

Vodafone claimed in written arguments to the lawsuit that there was “no evidence to support the allegation that Vodafone was colluding with any other defendant.” The trial, which is set to last three months, is underway.

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