Vodafone files USD956 million damages claim against Telefonica

16 Sep 2008

British broadsheet The Guardian is reporting that Vodafone has launched a EUR670 million (USD956 million) damages claim against Telefonica, accusing the Spanish operator of alleged abuse of its dominant position in the Spanish mobile market. Vodafone claims that by forcing mobile phone retailers to sign exclusivity contracts in the late 1990s, Telefonica Moviles Espana (TME), Telefonica’s wireless arm, hindered growth at Airtel, a mobile phone subsidiary Vodafone acquired in 2000. Vodafone is arguing that these agreements blocked potential business that accounted for more than 50% of sales in the market at the time, and that if they had not been in place they would have won EUR529 million more in business, whilst saving EUR141 million in costs. The case is the latest in a long string of litigation between the operators, with Airtel bringing its original abuse of market power case against Telefonica in 1996; ruling against Telefonica the Spanish competition commission fined TME EUR3.9 million and the parent company EUR900,000 in 1999.