Dec. 22, 2014

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"Civilization" of regulation or "racket"? T-Mobile pays $ 90 million to stop prosecution

by Claude Chevalier

In regulating more than anywhere else, the most important is the time.

Operators can't endure uncertainty. The uncertainty of the litigation is probably the worst weapons that the controller can turn against them. So much so that The Economist, in its issue of August 30, 2014 estimated that US regulators have transformed the repression organized racket, operators to pay for stop procedures, the fact that they are right or wrong is no longer the issue.

Seen in banking and finance, seen here in telecommunications.

In July 2014, the Federal Trade Communication opens proceedings against T-Mobile, a subsidiary of Deutsche Telekom, for charging customers for services provided by external providers, unsolicited services. The company had immediately claimed not to have breached the rules.

Then, a first calculation of the prejudice of consumers has been calculated. Each subscriber aspiring to claim a possibly unwarranted addition of about $ 10 a month for many years, the amount of damages was very high , for example in connection with a class action.

The company chose to stop there and have a settelment for $ 90 million, attributable in part to consumers, but also to different states, also paying a transactional fine to the US federal treasury.

The case is therefore financially resolved. The Federal Communications Commission commented on the agreement stating that overcharging is "a major problem" for consumers.

The case has been conducted for this operator as it has been for AT & T in October 2014, concluding a similar agreement for $ 105 millions.

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Should we rejoice or not?

One will rejoice if one believes that the key is to close the file and enable the company to return to its business.

The reference may be regrettable if we think:

  • Punishment must remain a matter for the courts;
  • The accused persons, even if they are companies, need time for the defense ;
  • Regulatory Law must issue rules and interpretations of the texts, the law is depleting by agreements that close the litigation, the main objective being ... never reach the judge.

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