In an article published in the April 2003 issue of the Bird & Bird Communications Bulletin Carrier Pre-selection and win back campaigns, April 2003, we discussed the latest developments in legal proceedings that had been launched in a number of Member States against win back campaigns of incumbent telecoms operators.
Recent decisions in France and the Netherlands have led us to revisit and further analyse this topic. After briefly summarising the subject matter and the previous landmark decisions on the legacy of win back campaigns of the incumbents, this article analyses the new procedural approach introduced by the French Commercial Court, in its decision of June 18 2003, challenging such anti-competitive conduct.
Definition of a “win back campaign” and procedural developments
“Win back campaigns” are those marketing activities launched by an incumbent to induce its former customers, who have switched to a new telecoms service provider, to terminate their new subscription and return to the incumbent. Win back marketing activities developed as a result of the introduction of competition into telecoms services, allowing customers the option of pre-selecting a carrier. They are all the more questionable where the incumbent uses privileged customer information passed on its network division for the benefit of its business services activities. Taking into consideration the fact that the Commission has not expressed any intention of opening an inquiry into these win back campaigns, alternative telecoms providers who wish to mount a challenge against the incumbent’s behaviour must file a claim before the relevant national authorities or courts.
Until recently, the majority of decisions on this issue have been made by national regulatory authorities, (“NRAs”) and involved either preventing such illegal conduct, or imposing fines; for example, a landmark decision of the Spanish telecoms authority, the “CMT”, prohibited Telefonica, for a four-month period, from taking any steps designed to win back customers that had pre-selected an alternative provider. More recently, the CMT fined Telefonica €3.5 million over one specific promotional campaign which it had circulated to 418,017 customers in March 2002.
A recent decision which may give some comfort to the incumbent, is that of the NMA in the Netherlands. In this decision, allegations of abuse of a dominant position by the national incumbent, KPN, were not upheld by the NMA, which ruled that because KPN had only used data which was available from its activities on the market for services in conducting its win back campaign, this did not constitute an abuse of a dominant position.
Recent procedural developments in France
Until the decision of June 18th, alternative operators to France Telecom (the French incumbent) had never successfully challenged its win back campaigns before the French Courts. As in other Member States, in 2002, the alternative telecoms provider, Tele 2 approached the French regulator, the ART, alleging that France Telecom was using privileged data provided by its network division, at the retail level, in conducting its win back campaign. Following an investigation, the ART issued a warning to France Telecom to stop using such privileged information. At the same time, Cegetel, another alternative provider, commenced an action for damages before the French Commercial Court, rather than before the national regulatory authorities, claiming that France Telecom’s campaign was unfair. Unfortunately, whilst Cegetel succeeded in preventing France Telecom from using its name in advertising to its former customers, its action for damages failed due to a lack of evidence. However, another alternative operator, 9 Telecom, who commenced a similar action before the same court against France Telecom, obtained a landmark decision that found the incumbent guilty of unfair practice; €7 million in damages were awarded to 9 Telecom.
This success may be partially credited to the involvement of the ART, as well as the French competition watchdog, the DGCCRF, in the proceedings. As 9 Telecom suggested, the French Commercial Court invited explanations from the authorities which ultimately proved decisive in resolving the case. Thanks to their explanations, the Commercial Court was able to consider France Telecom’s win back campaigns to be unfair, by using privileged customer data sourced from its network division in its marketing services.
This judgment, even if appealed by France Telecom, is decisive in that it is the first time that an incumbent has been ordered to pay damages in relation to its unfair conduct in win back campaigns. The decision should open up a new type of action in order to challenge such anti-competitive conduct, and may be more worrisome for incumbents who may now be required to pay damages to every alternative operator that can demonstrate that it has been the victim of a win back campaign.
In summary, the possibility of a damages award brings to three the forms of penalty measures (other than a mere warning) that may be imposed on an incumbent for anti-competitive win back campaigns; the others being: a straightforward prohibition and/or a fine.
 Decision 2/2002 of July 18, 2002.
 Decision 09/03 of March 6, 2003.