UK Mobile Operators Attempt to Dismiss £3.3bn Overcharging Case

In a dramatic legal showdown, the UK’s biggest mobile operators – EE (BT), Vodafone, Three UK and O2 (Virgin Media) – yesterday sought to have a £3.285 billion class action lawsuit thrown out of court. The case, brought by consumer champion Justin Gutmann, accuses the telecom giants of overcharging customers for years by continuing to bill for handsets even after contracts ended.

Operators Cry Foul Over “Fundamentally Flawed” Case

Lawyers for the mobile firms argued vehemently that Gutmann’s case is “extraordinarily difficult” and “fundamentally flawed”. They contend it makes little sense to allege anti-competitive behavior in an industry known for its fierce competitiveness.

“Large parts of this case dating back to 2007 were brought too late,” insisted a Vodafone spokesperson outside the courtroom. “It’s virtually impossible for us to even identify eligible claimants from that long ago.”

28 Million Contracts in Question

At the heart of the dispute are so-called bundled contracts, which combine airtime service with the cost of a handset spread over the contract term, typically 24 months. Gutmann alleges operators kept charging the same monthly fee even after handsets were paid off, effectively making customers pay twice.

The case claims overcharging occurred on up to a staggering 28.2 million contracts. If successful, some consumers could be owed as much as £1,823 per contract. Many may have claims against multiple operators.

Ofcom Estimated 1.4 Million Impacted in 2018

This isn’t the first time the issue has raised eyebrows. Back in 2018, regulator Ofcom estimated around 1.4 million UK consumers were out of contract but still paying for handsets that should have already been paid off. The watchdog has pressured operators to change their ways in recent years, with mixed results.

“A wise consumer would of course switch to a cheaper SIM-only deal after their initial contract ends,” noted an O2 representative. “But we recognize not everyone does that. Some simply forget.”

Complex Legal Questions Loom

As the courtroom battle begins, thorny legal questions are emerging around consumer choice, contract terms, and the limits of retail pricing freedom. The mobile firms insist they have the right to set prices as they choose, as long as the competitive market functions.

Gutmann’s team faces an uphill battle, with a recent similar claim against BT over landline pricing having been dismissed. But they remain confident their case is substantially different and the sheer scale of alleged overcharging could sway the court.

Forward-Looking Impacts

Regardless of the eventual verdict, the high-stakes case is likely to have lasting repercussions for the UK mobile industry and its 54 million customers. Operators may be forced to implement clearer contract terms, separate handset and airtime pricing, and proactively move out-of-contract customers to cheaper plans.

For now, all eyes are on the Competition Appeal Tribunal as it weighs the legal merits and potential consumer benefits of allowing the multi-billion pound claim to proceed. An initial ruling is expected in the coming weeks, but appeals are almost certain. The courtroom drama, it seems, is only just beginning.