Vodafone agrees to pay €400,000 penalty

 

VODAFONE IRELAND has agreed to pay a €400,000 penalty under a settlement of court proceedings brought against it by communications regulator ComReg related to roaming charges.

ComReg had alleged Vodafone had breached EU regulations aimed at protecting phone customers from “bill shock” over charges for accessing internet and web-based services when “roaming” within the EU.

When the case was admitted to the Commercial Court last December, ComReg claimed a €500,00 penalty on Vodafone was appropriate for the alleged breach which affected some 5,000 people, mainly business users.

It was claimed the relevant EU roaming regulations required Vodafone to implement certain options for roaming users and ComReg served a notification of non-compliance on Vodafone in that regard.

Vodafone contested that notice, said the dispute related to about 0.4 per cent of its customers and it had made “strenuous efforts” to try and establish what exactly it was the regulator wished it to do.

The case was due to be heard next month, but Mr Justice Peter Kelly was told yesterday it had been settled.

Paul Sreenan SC, for ComReg, said Vodafone, under the settlement, had consented to pay a financial penalty of €400,000.

Mr Justice Kelly noted the settlement and made an order by consent that Vodafone would pay the agreed sum by February 17th.

It was agreed there was no need for trial concerning the other issues, he also noted, and listed the matter for mention only in March.

The case arose from a finding of ComReg that Vodafone failed to comply with its legal obligations under provisions of the Roaming Regulations.

It was claimed Vodafone denied its customers on data roaming plans the protections afforded to them by the regulations.

Vodafone, the regulator claimed, illegally deprived its customers of the option to have a default spending cap applied to their data roaming plans by March 1st, 2010.

It was alleged Vodafone illegally placed 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 was also claimed Vodafone continued to illegally place a restriction on customers who could choose to have the default spending cap.

There were 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 claimed.

The roaming regulations introduced protections aimed at protecting customers from “bill shock” when data roaming within the EU, the court noted. 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.