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Brit telcos deliberately killed Phones 4u, claim admins in £1bn UK High Court sueball

One-time retailer has a problem: Key evidence is on a lost fondleslab

Administrators of UK mobile retailer Phones 4u claim that the company was deliberately collapsed by a cartel of British telcos – although an iPad with key evidence "cannot now be found", according to the High Court.

The eye-opening allegations appeared in a 17 July judgment in the High Court as Phones 4u's administrators, PwC, pursue a £1bn lawsuit against EE, Vodafone and Telefónica – as well as Deutsche Telekom and France's Orange.

All of the defendants deny they were involved in "any collusion or anti-competitive conduct".

In the judgment, which you can read here, Olaf Swantee, chief exec of EE when Phones 4u fell into administration six years ago, is said to have received "anti-competitive approaches" from Ronan Dunne, then the CEO of O2 (Telefónica). Although Swantee quietly recorded Dunne on his personal fondleslab, as EE told the court, the judge observed "this iPad cannot now be found".

Phones 4u collapsed in September 2014 after EE and Vodafone terminated their supply contracts unexpectedly. The retailer built its fortunes by reselling consumer phone contracts for the major mobile networks from its High Street bricks 'n' mortar shops.

"P4U alleges, in summary, that these events were not the result of independent action by these competing MNOs but followed exchanges or commitments between the Defendants, which infringed the prohibitions on anti-competitive agreements or arrangements under UK and EU competition law; and that such conduct was at least the principal reason why the MNOs ceased to deal with P4U," wrote judge Mr Justice Roth, summarising the case.

The telcos deny all wrongdoing, having told the court they all terminated their P4U contracts "for sound commercial reasons", twisting the knife by adding that P4U was bound to collapse thanks to its existing "financial problems" in any case.

Details of the case emerged from an interim judgment handed down by Mr Justice Roth as all sides argued about whether former and current employees should be ordered to hand over documents from 2014.

P4U urged the court to say yes, stating: "It is in the nature of allegations of collusion that conspirators will likely have used relatively informal/discreet channels of communication to reach and implement any unlawful agreement or understanding."

In the face of denials from the telcos, who tried citing EU privacy rights and German law alike, the judge ruled for P4U – with a caveat allowing personal phones and tablets to be handed to a forensic IT firm rather than P4U's lawyers.

He ruled: "I would add that the principle will become increasingly important as employees work more from home, where they may not have a separate work computer or an additional mobile phone provided by their employer."

Back in 2014 Vodafone told The Register, on the day of P4U's demise, that it had done nothing wrong: "We strongly reject any suggestion that we behaved inappropriately at any stage during our negotiations with Phones 4u. The outcome was the result of a transparent negotiation over many months… when we terminated our contract earlier this month, we made it clear that we would honour our existing contract, which runs until February 2015, to give them sufficient time to finalise one of those alternative strategies."

The full trial is not due to take place before mid-2022 "at the earliest", in the judge's words. ®


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