France’s three dominant mobile telephone operators – Orange France, SFR and Bouygues Télécom – were on Thursday fined a record €534m ($632m) for collusion.
The reprimand is an illustration of consumers’ growing muscle in France, coming days after Paris’s six most famous and opulent hotels were disciplined for the same offence.
The affair also prompted more questions about the former business career of Thierry Breton, finance minister. Mr Breton was chairman and chief executive of France Télécom, Orange France’s parent, for part of the period in question.
According to the Competition Council, which investigates anti-competitive behaviour in France, the three mobile operators struck a secret deal not to compete too aggressively for market share between 2000 and 2002.
Documents seized at Orange France,referred to a “market share Yalta”. The trio were also found to have regularly exchanged “detailed and confidential” information on the volumes of new customers and cancellations between 1997 and 2003.
Although this did not directly affect pricing strategies – the operators were not accused of price-fixing – the contact was “likely to distort competition”, the council said.
Consumers suffered after ‘market-share Yalta’
Competition regulators did not believe France’s three dominant mobile telephone operators’ denials that they colluded in carve-up.
Orange France was fined €256m, reflecting its status as market leader. SFR, 56 per cent owned by France’s Vivendi Universal and 44 per cent by the UK’s Vodafone, was fined €220m. Bouygues Télécom, part of the Bouygues conglomerate, was ordered to pay €58m.
All three operators will appeal. SFR said it was “deeply shocked”, maintaining that the fine was disproportionate compared with previous cases.
Dominque de Villepin, the French prime minister, said yesterday that the collusion had had nothing to do with Mr Breton, whose track record at Rhodia, the chemicals group, had already been under examination.
Mr Breton was appointed at France Télécom in October 2002, more than a year before the controversial sharing of data between Orange France and its mobile competitors stopped.
The finance ministry denied that he had been aware of any wrongdoing until alerted to the issue in July 2003. By that time, it said he had already redirected the group’s strategy away from market share to focus on increasing the profitability of existing customers.
The investigation into mobile telephone groups was partly prompted by a complaint from the consumer group UFC Que Choisir.
In a move that could tilt the balance of power yet further away from companies to customers, plans for a watered-down version of American class action lawsuits are expected to be presented to the government later this month.
Additional reporting, Peggy Hollinger in Paris
