BT wins £1.3 billion lawsuit despite 'excessive' prices

The UK's Competition Appeal Tribunal (CAT) ruled on a class action lawsuit brought against the incumbent operator almost four years ago seeking compensation for excessively high prices charged to standalone fixed-line phone customers over the 2009-2017 period.

The verdict may have gone in BT's favour, but the CAT still noted that its prices were excessive. Just not sufficiently so to warrant a hefty compensation bill, apparently.

BT had only a short comment to make on the matter.

"Today the Competition Appeal Tribunal (CAT) handed down its judgment in the case of Justin Le Patourel v BT Group plc (BT Group) in which the CAT has dismissed the claim and found that BT Group's conduct did not breach competition law," it said, in a stock exchange filing. "We take our responsibilities to all of our customers very seriously and welcome today's ruling."

In addition to being happy to swerve that potential compensation payout – which would have totalled a few hundred pounds per customer, such was the extent of the matter – the telco is doubtless also glad to see the back of a legal case that has rumbled on for years.

An Ofcom investigation concluded as long ago as 2017 that BT had been overcharging its landline customers and as a result the operator lowered its prices. But consumer champion Justin Le Patourel took it upon himself to take things further, and in early 2021 launched a class action suit, now dubbed CALL, the Collective Action on Land Lines. The aim of the suit was to force BT to pay back the additional revenues collected while the old prices were in force – that's from 2009 to April 2018 – as well as to compensate customers who were not included in the price reduction, for various reasons.

In total, that's around 3.5 million customers that could have received a payback of £300-£400 or more. Hence the ballpark £1.3 billion figure.

The wheels of the legal system turned fairly slowly, as is the way of these things, and the case went to court earlier this year.

But those affected customers – and Le Patourel took the opportunity to pull on the heart strings and point out that many were elderly and have since died – will not receive an early Christmas present in the form of compensation from BT, because the CAT made a clear distinction in its ruling between excessive and unfair prices.

"In our judgment, these prices were not unfair," the executive summary of its ruling reads. "We took into account, first, that while they were excessive, they were radically less than the excess relied upon by the CR [Class Representative]," it said.

"Further, we considered that BT provided distinctive value to its SFV [standalone fixed voice] customers such that its price bore a reasonable relation to value," the judgement states. And it goes on to define value not only in terms of what customers received from the telco, but also in BT's brand value as a whole.

"We found significant loyalty to BT which could not be dismissed as customers simply paying these prices because they had to. Indeed, they did not have to, because they were not captive or generally inert," it explained, adding that there was a substantial amount of switching in the market.

There's much more to the ruling, but it seemed pertinent to point out the above, given that BT's reputation was on the line here. Its prices may have been excessive, but there was value in there too.

"Overall, we considered that, whether taken by itself or in comparison with other prices, BT’s prices were not unfair, and therefore there was no abuse of dominant position. This meant that the CR's claim failed," the CAT noted.

And thus it's a happy Christmas for BT's legal team.