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Vodafone headquarters in Düsseldorf: In the spring, the company's fixed-network tariffs became more expensive

Photo: Federico Gambarini / DPA

Due to price increases for fixed-line Internet, the telecommunications provider Vodafone is facing a lawsuit from consumer advocates. The inflation of current contracts is inadmissible, the Federation of German Consumer Organisations (vzbv) stressed on Tuesday. A lawsuit had been filed with the Higher Regional Court of Hamm. It is one of the first proceedings to refer to a federal law that came into force in mid-October. Vodafone customers will thus be able to participate in a new form of class action by registering in a register of claims. This will probably open in a few weeks.

In the spring, Vodafone began raising the prices for its fixed-network tariffs for cable and DSL by five euros per month. For gigabit cable customers, for example, it went up from 40 to 45 euros. In total, around ten million customers were affected. Mobile customers and fibre-optic fixed-line contracts were not affected by this price change.

Vodafone believes that it has complied with applicable law. The company justifies the increase with higher costs for energy and materials, for example. The majority of German companies have raised prices in recent months due to inflation, says a company spokesman. "We've been trying to buck this trend for a long time." However, due to sharply increased costs, fixed-line prices had to be "moderately adjusted". In the future, we will continue to attach great importance to ensuring that our fixed-line customers can use broadband Internet, TV and fixed-line telephony at affordable prices."

A lawsuit with symbolic value

In fact, it has also become more expensive for other telecommunications providers this year, for example at 1&1. The class action is not directed against these companies. It is not possible to sue all companies at the same time, but is now putting the price increase pioneer Vodafone in its place, according to the vzbv. An information page on the class action lawsuit is available online here.

Vodafone has granted its customers a special right of termination in the event of price increases, but this is not enough for consumer advocates. From their point of view, the Düsseldorf-based Internet company should not have unilaterally increased the prices for current contractual relationships, i.e. without renegotiating with customers. Service providers usually enforce higher prices on new contracts. Even with existing customers, companies sometimes turn the price screw, but are viewed critically by consumer advocates.

"The vbzv considers Vodafone's price increases to be ineffective," says Ramona Pop, head of the association. The class action is intended to ensure that millions of customers can get money back directly: "Five euros in additional costs per month is a lot of money for many people." The class-action lawsuit makes it easy for consumers to defend themselves against the increase, Pop said. As early as May, the Federal Association of Consumer Organisations announced the planned lawsuit, and in the weeks that followed, more than 10,000 people reported to the vzbv, according to its information.

Money back? It's now easier

If consumers feel disadvantaged in a contractual relationship, they have so far been able to get money back by means of a so-called model declaratory action. However, this can be tedious. After all, if the verdict is in the interests of the consumers, an unlawful act by a company is confirmed in black and white. However, this does not give rise to a direct claim for payment against the company.

Rather, the citizen must contact the company himself, ask it to pay and, if necessary, sue it again. In court, he has a good chance. Nevertheless, the direct confrontation with a company is likely to represent a high inhibition threshold for many consumers.

With the new class action, the position of the consumer improves. After a positive verdict, the court appoints a so-called trustee, who receives money from the losing company. It examines consumers' claims and then transfers an amount to them if necessary. This means that consumers no longer have to confront the company themselves, they have it easier than before.

The proceedings against Vodafone are seen as sending a certain signal to the business community. It's only about five euros per month, which every customer could get back. Depending on how many customers participate, however, it could be financially painful for Vodafone in the event of a defeat in court. In addition, a court decision in favor of consumers could have a deterrent effect to a certain extent – companies could become more cautious about price increases in current contracts in the future.