27 May 2010
The Market Court has prohibited TeliaSonera from abusing an ambiguous and misleading clause regarding the continuation of mobile phone contracts. The company has failed to explicitly disclose to the customers that the contract will be automatically continued, unless specifically terminated by the customer.
The Market Court has issued a ruling regarding the validity of fixed-term mobile phone contracts. The ruling applies to TeliaSonera’s Kestoetu contract. A customer who has signed a Kestoetu contract pays a maximum charge of one euro for all regularly priced, domestic phone calls made during Sunday.
TeliaSonera has offered the Kestoetu contract as a one year fixed-term contract. However, the contract has not expired after one year, but the customer has had to specifically terminate the contract no later than two weeks prior to the end of the contract period. TeliaSonera has reminded the customer of the termination option with a single text message or a multimedia message approximately one month prior to the end of the contract period.
If the customer has not reacted to the termination reminder, the agreement has automatically continued for an additional year at a time. The customers have not always been aware of the extension, and they have been surprised to learn that they cannot switch their phone number to another operator due to the Kestoetu contract.
The Consumer Agency / Consumer Ombudsman considered this type of contractual linking to be illegal and decided to take the matter to the Market Court. According to the Consumer Agency, fixed-term contracts must be terminated at the end of the fixed term, without the customer having to react to the matter.
The Market Court concluded that TeliaSonera cannot carry on linking fixed term contracts in this manner. The automatic continuation of the contract must be more explicitly stated in the terms and conditions of the contract and disclosed to the customer in an intelligible manner already during the conclusion of the contract. Furthermore, the customer cannot be notified of the ending of a contract period and the beginning of a new fixed-term period simply via a text message or a multimedia message.
The Market Court also ruled that consumers must have the right to transfer their phone numbers to other operators, regardless of a fixed-term mobile phone contract. However, the customer will not be freed from the previous contract, but has to pay the expenses related to the contract until its termination. These expenses depend on the contents of each contract.
The Consumer Agency / Consumer Ombudsman has expressed concern over the fact that fixed-term contracts are becoming more commonplace and thus considers the ruling of the Market Court to be fair.
“The freedom of movement of consumers within the market advances the functionality of the market and therefore is also profitable to companies. Companies, however, do not always seem to grasp this. Instead, they try to tie customers down by even linking fixed-term contracts,” states Anja Peltonen, Director of the Consumer Agency.
The Market Court ruling will take effect on 1 July 2010. Both parties may appeal to the Supreme Court by filing a petition for certiorari until 29 June 2010.