Vodafone sued over regulations breach

Communications regulator ComReg has sued Vodafone Ireland over alleged breach of EU regulations aimed at protecting phone customers from “bill shock” over charges for accessing internet and web based services when “roaming” within the EU.

ComReg also claims imposing a €500,000 penalty on Vodafone is appropriate for the alleged breach which allegedly affected some 5,000 people, mainly business users.

Paul Sreenan SC, for Comreg, told Mr Justice Peter Kelly today the relevant EU roaming regulations required Vodafone to implement certain options for roaming users and ComReg had served a notification of non-compliance on Vodafone in that regard. Vodafone contested that notice.

ComReg contended a €500,000 penalty on Vodafone was appropriate, counsel said.

Niamh Hyland SC, for Vodafone Ireland, said the case related to about 0.4 per cent of its customers and her client had made “strenuous efforts” to try and establish what exactly it was the regulator wished it to do.

Vodafone had hoped it would not be necessary to bring the proceedings but was consenting to their being fast-tracked in the Commercial Court, counsel added.

Mr Justice Kelly admitted the case to the court and adjourned it for hearing in March next.

The case arises from a finding of ComReg that Vodafone failed to comply with its legal obligations under certain provisions of the Roaming Regulations. Comreg is seeking orders requiring Vodafone to comply with the regulations and to pay the regulator €500,000 arising from the alleged breach.

It is claimed Vodafone denied its customers on data roaming plans the protections afforded to them by the regulations. Vodafone illegally deprived its customers of the option to have a default spending cap applied to their data roaming plans by March

1st 2010 and illegally placed its customers on the Vodafone spending cap of €300 (€363 with VAT) on and after July 2010 when it should automatically have put them on the default spending cap, it is claimed.

It is also claimed Vodafone continues to illegally place a restriction on customers who could choose to have the default spending cap. There are about 5,598 customers on Vodafone’s €300 spend cap of which about 1,040 are residential customers and the rest are small and medium sized business users, ComReg claims.

ComReg says the roaming regulations introduced protections for customers aimed at protecting them from “bill shock” when data roaming within the EU. Bill shock arises when a user of a mobile phone receives a larger bill than they might have expected for accessing internet and web based services while data roaming outside their home jurisdiction within the EU.

Mobile phone operators are able to track how much a data roaming customer is spending and are required to give customers a means of limiting their expenditure. They must provide a “spend cap” and can offer such caps at different levels, as long as one of them is €50, excluding VAT. The operator is required to send the customer a text message alerting them when they have spent 80 per cent, and then 100 per cent, of their spend cap.