Record fines for French mobile phone cartel
French antitrust authorities slapped record fines on the country’s three mobile operators today after a four-year investigation found that Orange, SFR and Bouygues illegally shared sales data and conspired to undermine competition.
The three networks were ordered to pay a combined €534m, the largest fine ever imposed by France’s Competition Council.
In a 90-page report, the watchdog said the operators had shared “precise and confidential” commercial information every month for six years, and even agreed to freeze their respective market shares in 2000-2002, easing competitive pressure on prices.
“The existence of this collusion has been established through the recovery of serious, precise and consistent evidence, including hand-written documents explicitly mentioning an ’agreement’ between the three operators,” the regulator said.
France’s main consumer organisation, UFC-Que Choisir, said it planned further legal action to recover damages it estimates at €50-80 per mobile subscriber. UFC filed an antitrust complaint against all three networks in 2002, a year after the antitrust authority launched its own probe.
The decision is potentially embarrassing for Finance Minister Thierry Breton, who was chairman and chief executive of Orange parent France Telecom at the time the cartel was in place.
Prime Minister Dominique de Villepin came to Breton’s defence today when asked whether the minister’s former France Telecom role – relinquished earlier this year – could undermine his position.
“That has absolutely nothing to do with it,” Villepin said. “Thierry Breton is doing a great job as finance minister and he will continue doing his job.”
Orange vowed to appeal against the decision and its €256m fine – the largest of the three penalties.
“Orange France disputes the unfounded and excessive penalty levied against the mobile telephone sector in France,” the company said.
SFR, a unit of Vivendi Universal, also said it was “profoundly shocked” by its €220m fine and planned to appeal. A spokeswoman for the telecom division of Bouygues declined to comment on whether it would appeal against its €58m penalty.
During the investigation, the three mobile networks admitted sharing confidential sales data, arguing unsuccessfully that the exchanges had not affected competition and that they had not sought to freeze their market shares.
The market-share deal was concluded at a time when sales growth was slowing on the maturing French mobile phone market, the regulator said.
Efforts by the three operators to squeeze more profit out of existing clients “led to an increase in prices” at precisely the time the freeze was negotiated in 2000, it said.
The three operators began exchanging sales data three years earlier and halted the practice only in late 2003, in response to the antitrust probe.
