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BT has successfully fended off a £1.3 billion ($1.6 billion) class action brought on behalf of three million landline customers, with the Competition Appeal Tribunal (CAT) ruling Thursday that while some prices were excessive, they were not unfair. This landmark decision marks the first substantive ruling under the U.K.’s collective proceedings regime.

Tribunal Rejects Abuse of Dominant Position Claim

The class action, led by representative Justin Le Patourel, accused BT of abusing its dominant market position by charging unfairly high prices to customers using Standalone Fixed Voice (SFV) services—landline-only or unbundled landline and broadband contracts.

However, the tribunal determined that BT’s pricing practices did not constitute an abuse under Section 18 of the Competition Act 1998.

“Overall, we considered that, whether taken by itself or in comparison with other prices, BT’s prices were not unfair, and therefore there was no abuse of dominant position,” the tribunal said in its judgment summary.

Pricing and Customer Loyalty Scrutinized

The claim, which sought hundreds of pounds in compensation per customer, argued that BT increased prices for landline-only users while offering discounts to those purchasing bundled packages. The claimants said BT exploited loyal customers, particularly the elderly, who they alleged were less sensitive to price changes.

The tribunal rejected these arguments, finding no evidence of exploitative behavior. It emphasized that SFV customers were not “captive” and faced no barriers to switching providers.

“The SFV customers were not captive; there were no barriers to them taking alternative options,” the judgment read.

The tribunal also dismissed claims that BT lacked transparency with customers, regulators, or the press, noting that customer loyalty to BT reflected the perceived value of its services.

Legal and Industry Impact

The case broke new legal ground as the first full opt-out trial under the U.K.’s collective proceedings framework. The CAT’s ruling considered what constituted a reasonable profit margin and applied a “competitive benchmark” to assess BT’s pricing.

The class action stemmed from a 2017 Ofcom review, which examined disparities in pricing between landline-only customers and those with bundled services. Claimants argued BT unfairly benefited from its legacy as a government-owned operator that inherited a substantial customer base.

BT countered that the claim relied on an “excessively narrow” cost and margin analysis that ignored real-world market dynamics.

“We are delighted by today’s judgment,” said Patrick Boylan of Simmons & Simmons LLP, representing BT. “The evidence we presented demonstrated to the tribunal that BT’s products provided real and meaningful value to BT’s customers and BT charged a fair price for those products.”

Next Steps and Potential Appeal

Despite the loss, Le Patourel expressed partial satisfaction that the tribunal recognized BT’s dominant position and the excessive nature of its prices.

“We are pleased that the tribunal agreed with our experts’ view that BT was a dominant operator which charged excessive prices to its loyal customers,” Le Patourel said. “However, I am disappointed that the tribunal did not ultimately find in our favor on the question of whether BT’s prices were unfair.”

Le Patourel’s legal team, led by Mishcon De Reya LLP and barristers from Monckton Chambers and One Essex Court, is considering an appeal.

Legal Teams

BT was represented by Daniel Beard KC, Daisy Mackersie, and Natalie Nguyen of Monckton Chambers, alongside Simmons & Simmons LLP.

Le Patourel was represented by Ronit Kreisberger KC, Michael Armitage, and Jack Williams of Monckton Chambers, with Derek Spitz and Matthew Barry of One Essex Court, instructed by Mishcon De Reya LLP.