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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Tiscali UK Ltd v British Telecommunications Plc [2008] EWHC 2927 (QB) (01 December 2008) URL: http://www.bailii.org/ew/cases/EWHC/QB/2008/2927.html Cite as: [2008] EWHC 2927 (QB) |
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
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TISCALI UK LIMITED |
Claimant |
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- and - |
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BRITISH TELECOMMUNICATIONS PLC |
Defendant |
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Ronald Thwaites QC and John Samson (instructed by BT Legal & Business Services) for the Defendant
Hearing date: 14 November 2008
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Crown Copyright ©
Mr Justice Eady :
"Tiscali, the Milan-listed company that supplies broadband in the UK and Italy, expects its businesses to be bought up by rivals in the next two years, according to Tommaso Pompei, its chief executive.
Mr Pompei said he did not see many opportunities for Tiscali to buy rivals, and therefore it was more likely that the company's UK and Italian broadband operations would be sold."
"Tiscali CEO Tommaso Pompei said Wednesday he expects the Italy-based broadband provider's operations to be taken over by rivals in the next two years.
He said in an interview with the Financial Times that he doesn't foresee many opportunities for his company to make acquisitions of its own, and as a result he says Tiscali's Italian and UK broadband operations are likely to be acquired.
Europe has seen widespread consolidation in the consumer broadband sector, some of which has involved Tiscali."
"Tiscali chief plots sell-off.
You can be confident with BT Total Broadband.
Dear [Tiscali customer]
We can understand why you're wondering what might happen to your Tiscali broadband service. And because no-one really knows the answer yet, it could be a good time to look at an alternative broadband service."
Additionally, so far as the letter is concerned, complaint is made of the following paragraph:
"Changing your provider to BT could be the right move if you're worried about the future of your broadband service. Because BT Total Broadband is the UK's most complete and is here to stay … "
It then continues by telling the reader how easy it would be to switch and giving particulars of a special offer which was to end on 17 July 2008.
"5.1 Suggestions that the Claimant might be sold by its Italian parent company, Tiscali SpA, had appeared in the UK press in late January 2008 following a statement by Tiscali SpA's chief executive, Tommaso Pompei, that there was likely to be further consolidation in the European market for broadband internet (see Financial Times, 23 January 2008: 'Tiscali boss expects to be targeted by rivals'; and Total Telecom, 23 January 2008: 'Tiscali CEO expects company to be taken over').
5.2 However, throughout the period from this initial speculation until publication of the words complained of, Tiscali SpA made a series of public announcements which would have given customers of the Claimant the clear impression that the business of the Claimant was thriving (and that if the Claimant was sold, it would be sold as a going concern). For example:
5.2.1 In the 'Outlook and Prospects' section of Tiscali SpA's Draft Financial Statements for the year ended 31 December 2007 (issued to the public on 19 March 2008 and made available on www.tiscali.com) it was stated:
'The Strategic Plan approved in November 2007 envisaged a reinforcement of the Group's position in Italy and the UK, focusing, especially in 2008, on a rapid integration of Pipex in the UK and on a strong marketing push in Italy. Tiscali's positioning will be maintained on the high-capacity Dual Play (voice and data) offer and competitive prices, with an offer progressively enlarged to include IPTV services (already active in the UK and currently being launched in Italy) and the integration with mobile services …'
5.2.2 At the shareholders meeting of Tiscali SpA on 29 April 2008 (a report of which was published on www.tiscali.com) the company reported that 'The Group recorded significant growth in terms of ADSL users, revenues and results during the financial year'; and
5.2.3 In its public statement announcing the results for the first quarter of 2008 (available on www.tiscali.com), Tiscali SpA acknowledged the expressions of interest that had been received for purchasing the company as a whole and its operating companies in Italy and the UK (i.e. the Claimant) and also reported a 55% increase in revenues for the Claimant as a result of a rise in broadband customers.
5.3 Further, in the period immediately leading up to the publication of the words complained of, the Claimant had been expressly advertising and promoting the reliability of its broadband service.
5.3.1 During May and June 2008, newspaper advertisements promoting the Claimant's broadband service as 'fast and reliable' and the winner of the JD Power Survey appeared in the following publications: Daily Telegraph, Daily Mail, Independent, Times, Metro, London Paper, London Lite, Sun, Daily Star, Daily Mirror, Sunday Telegraph, Sunday Times, Observer, Independent on Sunday, Sunday Express, News of the World, Mail on Sunday, Daily Star on Sunday, Daily Express, Guardian and Sunday Mirror.
5.3.2 Radio adverts promoting the Claimant's broadband service as 'superfast and reliable' and 'fast and reliable' were broadcast during April and May 2008 on the following radio stations: Smooth North West, Rock/Magic 1161, Key 103/Magic 1152, Capital Radio, Hallam/Magic AM, Radio City/Magic 1548, Talksport, Virgin Total Network, Heart 106, Total Heart UK Digital, LBC Total, Classic FM, Big City Network and Magic 105.
5.4 It is to be inferred, from the above, that a large proportion of the recipients of the Letter would, prior to its receipt, have understood the Claimant as having given them no warning that the continuity of their broadband service was at risk in any potential takeover and, by making positive statements about the position of the Claimant and the reliability of the Claimant's broadband service, had thereby given the impression that there was no risk."
" … that the Claimant had failed to safeguard the interests of its customers by ensuring the continuity of its broadband service and/or failed to warn its customers that its broadband service was at risk in the event of a sale or takeover of its business."