Digicel accuses US rival of ‘victim shaming’ in $60m counterclaim

Denis O’Brien’s Caribbean mobile operator says UPM using ‘shock and awe’ tactics

Denis O’Brien’s company asked the court on Monday to throw out UPM’s  counterclaim: “After several failed efforts to have Digicel’s claims dismissed, [UPM] has resorted to what can only be described as their own brand of shock and awe offence.” Photograph: David Sleator

Denis O’Brien’s company asked the court on Monday to throw out UPM’s counterclaim: “After several failed efforts to have Digicel’s claims dismissed, [UPM] has resorted to what can only be described as their own brand of shock and awe offence.” Photograph: David Sleator

 

Digicel, the Caribbean mobile operator owned by Denis O’Brien, has accused a US telco of deploying “shock and awe” tactics in a legal dispute. The comments were in response to a $60 million counterclaim launched by the US company against Mr O’Brien’s company in a row over allegations by Digicel of fraud.

Digicel Haiti, one of the most profitable parts of the sprawling group, has waged a two-year legal battle against UPM Technology, which it accuses of illegally bypassing its network on calls to the impoverished island from the US.

It has accused UPM of “bypass fraud”, whereby a telco avoids paying mandatory fees to connect calls to another telco’s network by using an allegedly illicit system of electronic boxes and Sim cards.

Digicel rounded on UPM over the allegations in early 2015 after a private investigation, supplemented by raids in Haiti carried out by the local police. Several people, including hotel workers who it claimed had bought Digicel Sim cards for UPM, were arrested in Haiti and jailed, before being released.

Digicel subsequently filed a lawsuit alleging fraud and racketeering against UPM in an Oregon court.

In recent weeks, UPM, which denies the allegations, responded with a massive counterclaim of its own against Digicel Haiti and Digicel USA, which owns gateway switches in Florida and New York.

‘Profitable business’

UPM accused Digicel of breaching US telecommunications and competition laws and says it has a right to use Digicel’s network as it did. It claimed Digicel breached US law by preventing it from “engaging in profitable business”.

It claimed Digicel USA and Digicel Haiti co-ordinated to block UPM calls, costing it revenues and profits. It accused Digicel of anti-competitive behaviour, “malice, trickery [and] deceit”. UPM claimed losses of over $20 million and asked the court to treble the damages to punish Digicel.

Mr O’Brien’s company asked the court on Monday to throw out the counterclaim.

“As the old adage goes, the best defence is a strong offence,” said Digicel’s lawyers in a court filing. “After several failed efforts to have Digicel’s claims dismissed, [UPM]has resorted to what can only be described as their own brand of shock and awe offence.”

Digicel argued this week that “stealing telecom access and telecom services – even outside the US – is not competition, it is just stealing”.

‘Desperate’ bid

It claimed the UPM counterclaim was a “desperate” bid to shift focus away from its alleged theft: “UPM engages in what can only be described as telecommunications victim shaming – blaming Digicel Haiti for defending its business by identifying the theft and daring to do anything about it.”

It called for the counterclaim to be dismissed and requested a hearing in front of a judge.

The increasingly bitter and complex dispute chimes with Mr O’Brien’s related public stance that network builders such as his company are often treated unfairly by other companies, whose business models rely on exploiting its infrastructure but who won’t share revenue with Digicel.

He has previously hit out at internet-based companies such Viber, Google and Facebook for not sharing revenue with telco network companies, although he has never accused them of illegality, as he has with UPM.

Mr O’Brien declined to comment on the case last night.