UK’s biggest phone companies colluded to bankrupt Phones 4U, High Court hears

The UK’s major telecoms companies took part in a conspiracy to put Phones 4U’s out of business, lawyers acting on behalf of the bankrupt retailer told a High Court.

Executives at five major phone companies – EE, Deutsche Telekom, Orange, Vodafone, and Telefonica – unlawfully “colluded” to drive Phones4U into administration in a bid to eliminate the shop as a “competitive force,” the High Court heard.

Acting on behalf of Phones 4U, Kenneth MacLean QC said the phone companies joined forces to pull their products from the high street retailer’s shelves, after taking part in “brazenly anti-competitive discussions.”

Founded in 1987, as Midlands Mobile Phones, Phones 4U was acquired for £1.47bn by private equity firm Providence Equity Partners, before the firm was sent into administration in 2014.

The barrister said the phone companies used “shadowy” tactics to cut Phones 4U out as a middleman, and then used “Orwellian doublespeak” to cover up their unlawful activities.

MacLean claimed major companies including Vodafone, O2, and EE, used “euphemisms” around “structural change” and “market repair” in an “extraordinary series of anti-competitive contracts” which led to Phones 4U’s bankruptcy in 2014.

The bosses of major phone companies also held meetings, including one at London’s five-star Landmark Hotel in Marylebone, during which they agreed to cut the number of handsets sold to independent retailers such as Phones 4U, the court heard.

The QC also claimed the execs used burner phones and made sure that documents went missing, as he argued the firms made “significant efforts” to obscure any evidence.  

The phone companies all deny the allegations and claim there is no evidence of collusion between the firms.