France-based mobile operator Free claimed victory in a long-running legal spat on the definition of handset subsidies as a consumer credit facility.
The decision, made by French high court the Court of Cassation, follows a complaint made by Free in 2012 asserting the provision of handsets with the cost spread across the duration of a contract to be equivalent to a consumer credit loan, which in some cases “flouted legal obligations”.
Iliad-owned Free sells SIM-only deals and provides handsets – if required – through a separate rental agreement.
The court verdict ruled all credit facilities must adhere to sections of the French Consumer Code covering loans.
In a statement, Free said: “The decision made by the Court of Cassation makes it impossible, without complying with the rules governing consumer credit loans, to allow payment for telephone handsets to be spread over time as part of a mobile phone contract, a system deemed to be “rotten to the core” by one particular consumer protection association.”
The operator added the decision would give it access to a market of 17 million people it said were tied into contracts which could be nullified by the new definition of the handset segment of a contract.
Free is France’s newest and smallest operator: it sparked a fierce price war on entering the market in 2012.
By the end of 2017 it had 13.5 million connections – including M2M – GSMA Intelligence figures show, placing it around 750,000 connections behind Bouygues Telecom and 7 million behind SFR.
Orange leads the market with 31.5 million connections.