Court Rejects Appeal Over Dismissal of BT UK Landline Overcharging Case

The Competition Appeal Tribunal (CAT) has rejected an appeal against its earlier dismissal of a £1.3bn class action claim against BT by the Collective Action on Land Lines (CALL) campaign, which had accused the national broadband ISP and phone provider of overcharging 2.3 million of its landline-only phone customers between 2015 and 2018.

The campaign 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. In theory, a victory for the campaign might have forced BT to pay out up to £1.3bn in compensation to consumers, but at the end of last year the CAT ruled that “BT’s prices were not unfair, and therefore there was no abuse of dominant position” and the claim failed (here).

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 found to be 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 court also considered that BT had 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.

However, toward the end of last month the CALL campaign attempted to lodge an appeal against CAT’s rejection of their claim, which argued that several errors in law had been made over the court’s assessment of common cost sharing, cost contribution and economic value. In addition, it argued that errors had been made over competition factors, as well as in concluding that the class members could not recover compound interest.

The hearing for this appeal took place yesterday afternoon and, to cut a long story short, the CAT rejected the case by finding that the claim had no real prospect of success. The CAT hasn’t yet published a full summary of the hearing and thus we don’t have all the details, but it seems as if CALL’s campaign may have reached its end.

The outcome could potentially also have some impact on a series of other cases in the UK telecoms space. For example, last year saw economic consultancy firm Fideres accuse Ofcom (here) of “tacitly allowing” TalkTalk, Virgin Media (VMO2) and other voice-only landline providers to overcharge consumers by up to £200m since 2009 (£100m by TT, £50m by VMO2, and a further £50m by smaller providers).

At the same time, mobile operators including EE (BT), Vodafone, Three UK and O2 (VMO2) are facing a class action claim worth “at least” £3.285bn from consumer rights champion Justin Gutmann and the law firm Charles Lyndon, which accuses them of historically overcharging for mobile handsets beyond the end of their contractual term (here). But this is obviously a bit different from CALL’s case against BT.