Austrian Surcharge Ban May Apply to T-Mobile

(CN) - An Austrian law prohibiting surcharges on certain types of payments should apply to T-Mobile and other carriers, an adviser to the EU high court said Thursday.

A consumer group took T-Mobile Austria to court over the phone carrier's policy of charging customers extra for making payments with cash, check or with online bill pay. The group said T-Mobile's practice violates Austria's general prohibition on handling surcharges.

After losing at both the trial court and appellate level, T-Mobile took its case to the Austrian supreme court. Justices there asked the European high court whether Austria's general ban on surcharges complied with EU law, and whether it extended beyond banks to cellphone companies.

In a Thursday opinion for the Court of Justice, Advocate General Melchior Wathelet said that member states are empowered to ban surcharges, and that it applies to the contractual relationship between T-Mobile and its customers. Furthermore, it applies to any form of payment a T-Mobile customer makes to the carrier.

EU law gives member states wide latitude to prohibit or limit the practice of surcharging as a way to encourage competition, promote ease of payment for customers and prevent unfair pricing, Wathelet added. He also noted that surcharges are often abused by companies to generate wider profit margins, rather than for cost recovery as is often claimed.

Both Austrian and EU law also permit T-Mobile, however, to give customers discounts for using payment types it deems more efficient, according to the opinion. The Austrian court must decide what its Legislature intended when it banned surcharges.

Wathelet's opinion was not made available in English. It is not binding on the Court of Justice, which has begun its own deliberations in the case.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit