Recall Support Services Limited et al v Secretary of State for Culture Media and Sport

13 Nov 2013

The Secretary of State for Culture, Media and Sport, assisted by the Home Secretary, has successfully defended six claims for Francovich damages totalling £451 million brought by commercial operators of GSM gateway telecommunications apparatus. The claimants alleged that the UK government’s decision to impose a license requirement on the operation of GSM gateways infringed the RTTE[1] and the Authorisation[2] Directives. The High Court (Rose J) held that the imposition of a license requirement in respect of the commercial use of one particular type of GSM gateway constituted a breach of the Authorisation Directive, but not one that was sufficiently serious to sound in an award of damages against the UK. Importantly it was also held that the licensing requirement as applied to the commercial use of the principal type of GSM Gateway in issue was not in breach of EU law.

The complex judgment in this case touches on a number of issues of European, competition and telecommunications law. It is perhaps of greatest interest to actual or would-be commercial operators of GSM gateways, who may now demand the removal of the licensing requirement as it applies to one particulartype of GSM gateway, and mobile network operators (“MNOs”), who will need once again[3] to consider carefully the competition law implications of refusing to supply SIM cards to GSM gateway operators.

[1] Directive 1999/5/EC on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity.

[2]Directive 2002/20/EC on the authorization of electronic communications networks and services.

[3] The issue of MNOs’ refusal to supply SIM card to commercial GSM gateway operators was initially considered in Floe Telecom Ltd (in administration) v OFCOM [2006] CAT 17, upheld on appeal in OFCOM v Floe Telecom (in liquidation) [2009] EWCA Civ 47 (see below).