Deutsche Telekom will have to pay "tens of millions of pounds" in damages after BT won a case against telecomms services alliance Global One in the German courts. The case is a clear signal that the incumbent telecomms operators in European Union countries cannot expect preferential treatment under EU deregulation.
The Dusseldorf High Court ruled that Global One - an alliance of Deutsche Telekom, France Telecom and US-based Sprint - breached EU competition rules by starting trading before meeting various conditions imposed on it by the European Commission. These conditions, laid down when the EC approved the formation of the group, were designed to preserve an open market in telecomms services. One condition was that two or more telecomms licences should have been issued in both Germany and France before Global One could begin operations.
The case was brought by BT and its German partner Viag and is expected to be the first of a string of actions between telcos, suing each other for alleged anti-competitive practices. Deutsche Telekom, which distributes Global One services in Germany, is considering an appeal once the exact amount of costs and damages for which it is liable is determined.
Tim Cowen, head of European law at BT, said: "It is important to preserve a level playing field."
However, BT could suffer from litigation if its rumoured alliance with Telefonica, the Spanish national operator, goes ahead as expected next week. Telefonica is said to be considering transferring its loyalties from Unisource, another alliance of European telcos to offer multinational services, to its rival Concert, which is made up of BT, MCI and, as of this week, Portugal Telecom. However, the Unisource members - the Dutch, Swiss and Swedish telcos - have warned their partner of possible litigation if it moves to Concert. This could include a formal complaint to the EU, alleging that Concert was in an over-strong and anti-competitive position. Although the Spanish government retains a golden share in Telefonica since privatisation in February, it is unlikely to intervene.
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