Administrators for Phones4U are awaiting the next round of their fight in the UK courts over allegations that the company was the victim of a deliberate, orchestrated attempt by the companies behind the EE, O2 and Vodafone mobile networks to put the chain out of business.

Speaking on a BBC Radio program today about the demise of Phones4U in 2014, John Caudwell said: “I have no doubt whatsoever that, in my mind, there was collusion, and there is very specific reason for that.”

“When Vodafone pulled out, that left the marketplace entirely to EE. EE could have easily then done an entirely different deal with Phones4U … and made a fortune out of Vodafone’s misfortune. And yet they didn’t. They pulled the plug as well. In my opinion, that was commercially stupid to the extreme degree — unless it was collusion.”

EE didn’t immediately respond to a request to comment on the remarks by Caudwell, who sold the Caudwell Group, which included Phones4U, to private equity in 2006.

All the mobile networks involved in the dispute have said they didn’t act unlawfully, that they made their decisions to end contracts with Phones4U for commercial reasons, and that their decisions were made independently of one another.

The High Court heard the damages action brought by Phones4U’s administrators in 2022, and in November last year it ruled that the mobile network operators hadn’t broken EU or UK competition law in their dealings with the retailer (see here).

Phones4U’s administrators asked the High Court for permission to appeal, but it refused (see here). They then went directly to the higher Court of Appeal, and in March this year they won their bid for leave to appeal (see here).

The Court of Appeal is now due to hear the substantive appeal next May. The UK antitrust regulator, the Competition and Markets Authority, has said it will intervene in Phones4U’s challenge.

— Claim and two rulings —

In the early 2010s, Phones4U was jostling with Carphone Warehouse as the UK’s best-known retailer of phone contracts for the major networks. It ended up collapsing after it lost major distribution contracts.

In 2018, Phones4U’s administrators filed a lawsuit claiming that its demise as a major mobile phone retailer in the UK, with numerous stores and service contracts, was the result of collusion among telecom operators that had collectively decided to terminate their agreements with the company.

They denied the allegations, and said they had made unilateral decisions to end dealings with Phones4U. They argued that its woes were down to its own management failings.

Among its court arguments, Phones4U said the court had applied wrong analysis to a hotel lunch meeting in 2012 between Olaf Swantee, who ran EE from 2011 to 2016, and Ronan Dunne, who led Telefónica’s O2 from 2008 to 2016. According to Phones4U, Dunne employed a pricing strategy in the telecom market that had a collusive effect.

In the High Court ruling, however, Judge Peter Roth said that “none of the defendants was in breach of either UK or EU competition law.” Further, he added that if O2 and EE had infringed competition law via a discussion between two executives in 2012, “that infringement did not affect the conduct of either O2 or EE as regards Phones4U.”

Roth did say that some “very senior executives … paid scant regard” to some recommended precautions around interacting with competitors. But, he said, it was “wrong to say that the evidence showed a general culture among the defendants of disregard for the requirements of competition law.”

The appeal case reference is CA-2024-000204 Phones 4U Limited (in Administration) v EE Limited and others.

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