The chair of the cross-party British Infrastructure Group (BIG), Grant Shapps MP, has called on the Competition and Markets Authority (CMA) to investigate claims of “potential collusion between some major operators,” which it’s alleged may have contributed to the sudden collapse of mobile retailer Phones 4U in 2014.
At present the High Court is in the process of considering a £1bn damages claim in the Phones 4U case, which at its height had around 350 shops across the UK. Such companies tend to be at least partly dependent upon agreements with the main mobile network operators for contract deals and other products (O2, Three UK, Vodafone and EE also have their own competing retail outlets).
As part of that case EE (BT) has sought to defend itself by claiming that the then CEO of O2, Ronan Dunne, attempted to suggest a coordinated withdrawal from independent shops (prior to the Phones 4U collapse). In a separate example EE further claims that one of Vodafone UK’s former bosses, Guy Laurence, tried to discuss pricing for 4G services and an executive for Carphone Warehouse later made a similar approach (i.e. the accusation is that they wanted EE to impose higher charges on consumers).
EE said they did not agree to any of the suggestions and lodged a protest with the lawyers for each company. O2 has denied the claims, while both Vodafone and the Carphone Warehouse declined to comment. All of the operators deny unlawfully colluding to rid the market of Phones 4U.
Grant Shapps MP said (Telegraph):
“Fresh revelations of potential collusion between some major operators will worry consumers and the British Infrastructure Group of MPs is anxious to see the sector come clean. [Mobile operators] can start by ensuring that full competition always benefits consumers.”
Shapps also called on mobile firms to stop “dodgy practices,” such as “continuing to charge full whack after a contract has ended.” We assume the latter is a reference to the issue of mobile and handset bundles, where consumers sometimes continue to pay the full price even after they’ve finished their contract and thus paid-off the cost of the handset. Ofcom are already looking to remedy this with new measures (expected very soon).
The CMA has also declined to comment and no doubt they’ll want to see the outcome of this case before deciding whether or not to investigate further.