BT and Deutsche Telekom have enjoyed only mixed success with recent challenges of their competitors’ marketing practices
Sky told to tighten up its marketing tactics in the UK: On 26 July 2023, the UK’s Advertising Standards Authority (ASA) released a ruling that bans a broadband advert on the Sky Business website, and instructs the operator to ensure its price comparisons are clear and that its promotions reflect prices available to all business consumers. The advert, displayed in January, claimed that customers could save £750 by switching from BT to Sky, with the smallprint basing this assertion on the price of Sky Connect’s Essential offer versus the standard price of the BT Business Essential package. It also noted that a £99 Openreach installation charge may apply. BT challenged whether the price comparison was misleading on two grounds:
BT’s Business Essential package was available at a lower promotional price than its standard price at the time the advert appeared; and
In BT’s view, a significant proportion of customers would have to pay the £99 installation fee, which had not been factored into the headline savings.
In the UK, BT’s complaint was only partially upheld: Referring to Committee of Advertising Practice (CAP) Guidance, the ASA’s ruling states that firms should compare their promotional prices with competitors’ promotional prices, or be clear that they are comparing their promotional prices with competitors’ normal prices. According to the ASA, Sky’s advert did not comply with the recommended behaviour in this regard. Also, while acknowledging that BT customers who were paying the standard price would be able achieve the £750 saving by switching to Sky, the ASA considered that the advert was not solely targeted at existing BT business customers. Absent further, more prominent, clarifying information, other business consumers would be likely to understand that they could make the saving by choosing Sky’s package over BT’s. The regulator therefore concluded that the promotion was misleading. The ASA did not, however, agree with BT that the £99 installation charge would affect a significant proportion of customers, instead considering it would only apply to first-time users of FTTP broadband. As this represents a small share of the overall market, the regulator felt that this fee would be unlikely to be a major factor in purchasing decisions, determining that the advert was not misleading on the second point.
In Germany, 1&1 claims win in long-running dispute with Deutsche Telekom: The incumbent launched a complaint over rival 1&1’s marketing of its 5G network as the most modern in Europe on the basis that it relies entirely on open RAN technology. As the only operator in the region to do so, the Koblenz Higher Regional Court sided with 1&1, although it was told to adjust its ‘5G at home’ advertising. The case is not the only obstacle 1&1 has encountered as it looks to establish itself as the country’s fourth mobile operator. The Bunderkartellamt (the national competition authority) is currently investigating whether Vodafone and its subsidiary Vantage Towers hindered 1&1’s 5G rollout plan, causing it to miss its base station deployment target for 2022. Encouragingly for the challenger, BNetzA is eager to ensure that its upcoming award of 800MHz, 1800MHz and 2.6GHz spectrum accounts for ”the interests of all market participants", which could help it secure the necessary frequencies to meet future coverage obligations.
