French mobile operators fined €534m

France's competition authorities have decided the country's three largest mobile operators are guilty of market collusion from 1997 to 2003 by sharing confidential information on their subscribers and agreeing market shares between them.

The Competition Council has fined the three mobile operators €534m – the largest ever competition-related fine in French history. Orange and SFR are to appeal.

The Council's decision said Orange France, Bouygues Telecom and SFR had been guilty of two types of market collusion, although market leader Orange received the largest fine of €256m, while SFR received €220m and Bouygues Telecom the remaining €58m.

The Council said "every month" between 1997 and 2003 the operators exchanged "precise and confidential" figures on the number of new subscribers signed up in the past month and also the number of users who had terminated their contracts.

Although the market collusion is not related to price fixing, the Council believes that the information sharing reduced "the uncertainty over other players' strategies" and also "the commercial independence of each business".

It also concluded the existence of an agreement between the three operators from 2000 to 2002, relating to the "stabilisation of their market shares around predefined common objectives".

This dialogue resulted in relative stability in the medium term between the three operators in the sales of new subscriptions and facilitated a change in strategy from 2000, the competition authority said.

From 2000, the operators stopped their "race for market share" in favour of working together to drive profitability from their customer bases – a change which notably brought about price increases and the adoption of measures including cheaper tariffs for post-pay customers and billing in blocks of 30 seconds after the first minute billed as a whole 60 seconds.

The focus of the collusion was therefore "to facilitate the putting in place of this strategy, allowing the three operators to guarantee they were pursuing the same policies at the same time and that their respective market shares would therefore remain stable".

When the decision was announced, the operators immediately responded. Orange said it will contest the decision, which it described as "seriously disproportionate", saying the monthly information swap was legal.

The France Telecom-owned operator also said the fluctuation of the operators' market shares by "several per cent" means there was competition in the sector and added that prices had fallen by 20 per cent in the period the Council examined.

SFR said it was "deeply shocked" by the Council's decision. "It's unfounded and does not correspond to the facts," the operator said, adding that it will also appeal.

Bouygues Telecom declined to comment.

The parties in question were notified this morning and the payment of the fines to the treasury is now due, the Council said – a payment which in general must be made within a year. The appeal process will take between one to two years.

Christophe Guillemin writes for ZDNet France