LONDON (Reuters) - A 1.3 billion pound ($1.65 billion) case against BT (LON:BT) for allegedly overcharging millions of customers for fixed telephone lines kicked off on Monday in the Competition Appeal Tribunal.
The claimants allege that the former telecoms monopoly excessively increased prices for the customers, while offering competitive bundles of fixed line and broadband services where it faced fierce competition from other providers.
BT said the lawsuit was "profoundly flawed" and ignored basic economic principles and market practices by arguing the company's prices were excessive.
Led by Justin Le Patourel, the claimants allege that BT charged unfairly high prices to about 3.7 million customers who took a standalone fixed voice (SFV) connection between 2009 and 2017, when British telecoms regulator Ofcom stepped in.
If successful, the claim could be worth around 300-400 pounds per customer.
Ronit Kreisberger, the lawyer representing the claimants, told the tribunal that BT had exploited its loyal fixed-line customers, many of whom were older and not technically minded, to drive prices above competitive levels.
She said the declining market segment was ripe for market abuse because it was not targeted by competitors, allowing BT to make "hay while the sun still shines".
BT's lawyer Daniel Beard said in court filings that large numbers of people frequently switched providers, with internal BT documents revealing concerns about losing landline customers.
He also argued that the case failed to take account of the value customers place on the BT brand and its service quality.
Beard said it was legitimate for companies to "seek to maximise their profits and that they price accordingly".
"Constraining pricing freedom is something that must be done with caution, lest the market principles and the signals that prices provide be undermined," he said.
The trial is due to last around eight weeks.
($1 = 0.7887 pounds)