US Supreme Court says no to Apple’s $440 Million patent appeal

The United States Supreme Court has denied Apple’s request to review a decision from the Court of Appeals for the Federal Circuit which found it liable for $439.8 million in damages, fees, and interest.

Dating back to 2010, case 2018-1197 concerned the commercial relationship between Apple and Internet security software and technology company VirnetX. VirnetX originally claimed Apple violated four patents for secure networks and secure communications links in its FaceTime and VPN on Demand features, and the judges agree with it.

“We are extremely pleased with the Supreme Court’s decision not to hear Apple’s writ of certiorari,” said Kendall Larsen, VirnetX CEO. “It has taken us 10 long years, 4 successful jury trials, 2 successful Appellate Court rulings and a favourable Supreme Court decision to get here.

“We believe in the fairness of the American justice system and have respectfully played by its rules no matter how arduous. We trust Apple will honour the decisions rendered by our courts and their esteemed judges and honour an agreement to abide by the court’s decision.”

Apple will know have 20 days to make the payment to VirnetX thanks to an agreement signed between the two parties in 2017, though it appears VirnetX investors are certainly pleased with the outcome. Share price jumped 12% for the Texas-based firm in the hours following the decision.

The original case was brought to the Eastern District of Texas courtrooms in 2010, though it has taken a decade for the final conclusion. After that ruling went in favour of VirnetX, Apple successfully petitioned the US Patent and Trademark Office, with a tribunal cancelling key elements of the patents in question. The Court of Appeals dismissed the findings from this tribunal, which led to the writ of certiorari to the Supreme Court.

In the writ, Apple argued the ruling from the Court of Appeals should be reviewed as the US Patent and Trademark Office decision effectively meant its FaceTime feature was not in violation of VirnetX patents. The Supreme Court has now refused Apple’s demands for a review.

What is worth noting is that this might not be an end to the drama. A Texas judge must now decide on the value of the damages, this could be done through a trial or without one. VirnetX maintains the $440 million figure is still valid as Apple sold more than 400 million devices which infringed on the patent, though Apple contests this. The ruling from the Texas judge might lead to another scrap between the pair.

Sonos says Google has been stealing its patented tech for years

Wireless audio specialist Sonos is suing internet giant Google, claiming it has knowingly used its patented technology without paying for it since 2016.

The grievance relates to Google’s portfolio of smart, wireless, networked speakers, now going under the collective brand of Google Home. Sonos says it gave Google access to its patents in 2013 in order to allow Google Play Music to work on the Sonos platform. At the time Google had no competing hardware.

A couple of years later, however, the Chromecast Audio dongle was launched, which promised to connect regular speaker to the internet. Initially, as the Guardian reported, each connected speaker required its own audio source. But within a couple of months Google added a bunch of additional functionality, including multi-room support, which seems to be the first of the patent infringements.

Here are the main patents Sonos claims are being infringed, although there are another 23 not detailed in the suit:

  • US. Patent No. 8,588,949 – Method and Apparatus for Adjusting Volume Levels in a Multi-Zone System
  • US. Patent No. 9,195,258 – System and Method for Synchronizing Operations Among a Plurality of Independently Clocked Digital Data Processing Devices
  • US. Patent No. 9,219,959 – Multi Channel Pairing in a Media System
  • US. Patent No. 10,209,953 – Playback Device
  • US. Patent No. 10,439,896 – Playback Device Connection

“Google is an important partner with whom we have collaborated successfully for years, including bringing the Google Assistant to the Sonos platform last year,” said Sonos CEO, Patrick Spence. “However, Google has been blatantly and knowingly copying our patented technology in creating its audio products.

“Despite our repeated & extensive efforts over the last few years, Google has not shown any willingness to work with us on a mutually beneficial solution. We’re left with no choice but to litigate in the interest of protecting our inventions, our customers, and the spirit of innovation that’s defined Sonos from the beginning.”

We’re not aware of any public Google response, but even if they have it will just be templated legalese claiming innocence, so let’s just take that as read. Sonos has filed suit in the Central California district court and also asked the International Trade Commission to block the importing of any of the products claimed to infringe the patents into the US. If Google is guilty of any of this it would be well advised to settle quickly as the PR from exploiting such a well-loved tech brand is unlikely to be good.

Ericsson gets a $150 million bargain on its corruption fine from the US

Swedish kit vendor Ericsson got a $150 early Christmas present from US authorities after its fine for violating corruption laws was finally revealed.

The consequence of being found guilty of using back-handers to grease the wheels of commerce in Djibouti, China, Vietnam, Indonesia and Kuwait as recently as Q1 2017 is a fine of SEK1.06 billion. But since Ericsson had already accounted from a fine of SEK 11.5 billion that means it now has 150 million bucks more than it expected to. It can now spend that bonus wedge on Christmas presents which, of course, it will account for in a transparent and correct manner.

To be fair to Ericsson this is probably common business practice in some or all of those countries, but the trick is not to get caught isn’t it? Both the US Department of Justice and the Securities and Exchange Commission have had a piece of this action and seems to have split the winnings equally, so Christmas should be fun there too.

The DoJ is trousering 520,650,432 in return for promising to drop all charges if Ericsson keeps its hands clean for the next three years. Presumably, if Ericsson does comply and the charges are dropped, the DoJ won’t pay back the half a bil in spite of Ericsson no longer being legally guilty of doing anything wrong. That makes the whole thing smell like state extortion, but what do we know?

Meanwhile the SEC prefers to round its takings to the nearest 10k and is pocketing $539,920,000, which hilariously includes $81,540k in interest. This fine seems to be for the same activities so it’s not clear why Ericsson has to pay it twice. Maybe the fine was always going to be around a bil and the DoJ and SEC couldn’t agree on jurisdiction, so decided to split it down the middle.

“The DoJ proceeding is a criminal enforcement action and the SEC proceeding is a civil enforcement action,” explains the Ericsson announcement. “The agencies resolve their investigation independently of one another using their own discretion and applying different standards of proof.  As a result, the DoJ and SEC have come to different conclusions based on the same facts.”

“I am upset by these past failings,” said Ericsson CEO Börje Ekholm. “Reaching a resolution with the US authorities allows us to close this legacy chapter. We can now move forward and build a stronger company. The settlement with the SEC and DOJ shows that we have not always met our standards in doing business the right way. This episode shows the importance of fact-based decision making and a culture that supports speaking up and confronting issues. We have worked tirelessly to implement a robust compliance program. This work will never stop.”

“Through slush funds, bribes, gifts, and graft, Ericsson conducted telecom business with the guiding principle that ‘money talks.’” said U.S. Attorney Geoffrey Berman. “Today’s guilty plea and surrender of over a billion dollars in combined penalties should communicate clearly to all corporate actors that doing business this way will not be tolerated.”

“Implementing strong compliance systems and internal controls are basic principles that international companies must follow to steer clear of illegal activity,” said Don Fort, Chief of IRS Criminal Investigation.  “Ericsson’s shortcomings in these areas made it easier for its executives and employees to pay bribes and falsify its books and records.  We will continue to pursue cases such as these in order to preserve a global commerce system free of corruption.”

So the IRS got a piece of the action too – nice. Here are the specific pieces of naughtiness Ericsson admitted to committing to the DoJ, the charges for which, don’t forget, will probably be dismissed in three years’ time.

Between 2010 and 2014, Ericsson, via a subsidiary, made approximately $2.1 million in bribe payments to high-ranking government officials in Djibouti in order to obtain a contract with the state-owned telecommunications company valued at approximately €20.3 million to modernize the mobile networks system in Djibouti.  In order to effectuate the scheme, an Ericsson subsidiary entered into a sham contract with a consulting company and approved fake invoices to conceal the bribe payments.  Ericsson employees also completed a draft due diligence report that failed to disclose the spousal relationship between the owner of the consulting company and one of the high-ranking government officials.

In China, between 2000 and 2016, Ericsson subsidiaries caused tens of millions of dollars to be paid to various agents, consultants and service providers, a portion of which was used to fund a travel expense account in China that covered gifts, travel and entertainment for foreign officials, including customers from state-owned telecommunications companies.  Ericsson used the travel expense account to win business with Chinese state-owned customers.  In addition, between 2013 and 2016, Ericsson subsidiaries made payments of approximately $31.5 million to third party service providers pursuant to sham contracts for services that were never performed.  The purpose of these payments was to allow Ericsson’s subsidiaries in China to continue to use and pay third party agents in China in contravention of Ericsson’s policies and procedures.  Ericsson knowingly mischaracterized these payments and improperly recorded them in its books and records.

In Vietnam, between 2012 and 2015, Ericsson subsidiaries made approximately $4.8 million in payments to a consulting company in order to create off-the-books slush funds, associated with Ericsson’s customers in Vietnam, that were used to make payments to third parties who would not be able to pass Ericsson’s due diligence processes.  Ericsson knowingly mischaracterized these payments and improperly recorded them in Ericsson’s books and records.  Similarly, in Indonesia, between 2012 and 2015, an Ericsson subsidiary made approximately $45 million in payments to a consulting company in order to create off-the-books slush funds, and concealed the payments on Ericsson’s books and records.

In Kuwait, between 2011 and 2013, an Ericsson subsidiary promised a payment of approximately $450,000 to a consulting company at the request of a sales agent, and then entered into a sham contract with the consulting company and approved a fake invoice for services that were never performed in order to conceal the payment.  The sales agent provided an Ericsson employee with inside information about a tender for the modernization of a state-owned telecommunications company’s radio access network in Kuwait.  An Ericsson subsidiary was awarded the contract valued at approximately $182 million; Ericsson subsequently made the $450,000 payment to the consulting company and improperly recorded it in its books.

There was clearly a fair amount of dodgy stuff going on in the above cases, but none of it is especially shocking. Under-the-table payments are an endemic issue everywhere in the business world and the trick is to launder them such that they look legit. Ericsson clearly failed to do this and that’s really what it’s being punished for.

But nobody seems to be questioning the US’s jurisdiction in prosecuting this matter. None of the back-handers were paid in the US or even seemed to involve US companies, so why is the US policing this matter? Maybe the answer lies in the fines, none of which will apparently find their way to the countries supposedly corrupted by all this. Even with a $150 million discount, the US authorities are now the ultimate beneficiaries of Ericsson’s naughtiness.

Ericsson not expecting any nasty surprises as US corruption investigation nears conclusion

Following reports that the US investigation into historical corrupt practices is set to finally conclude, Ericsson has indicated the fine should be as previously anticipated.

Bloomberg has a couple of those handy anonymous insiders whispering in its collective ear that the investigation into its compliance with the US Foreign Corrupt Practices Act (FCPA) could unveil its final conclusion before the end of the year. The report somewhat weakly asserts that the resulting fine could be in excess of a billion bucks.

Considering Ericsson has already publicly accounted for a $1.2 billion fine this is an especially uncontentious claim to make. Nonetheless Ericsson felt the need to issue a press release responding to this press coverage, perhaps concerned that its silence on the matter may be interpreted as it having something to hide.

“In light of recent media coverage about the resolution of the investigations the Company will not comment other than to confirm that the provision of USD 1.2 b.is still its current estimate of the amounts needed to cover the monetary sanctions, plus other related costs, as announced on September 26, 2019,” said the Ericsson statement.

So it seems highly unlikely that Ericsson will get stung for much more than that when the announcement is finally made. The company seems to have been in negotiations with US authorities over the size of the fine for a year or two, so it would be very odd if the process still held any surprises for anyone involved.

Huawei CFO updates her prison diary

Meng Wanzhou, the Huawei CFO being held in Canada awaiting deportation to the US to stand trial, had publicly reflected on her challenging year.

Published on the bit of the Huawei site reserved for broader publicity initiatives such as CEO interviews, Meng’s account is headed ‘Your warmth is a beacon that lights my way forward’. That sets the scene for a narrative focused on how tough the year since her arrest in Canada has been. She contrasts her busy life as a Huawei exec with her boring one under house arrest, in which she has so much spare time that she can now read books and even do some painting.

The warmth referred to seems to be messages of support from Huawei colleagues on the company’s internal messaging board and the crowds that turn up whenever she appears in court. On top of that even people delivering take-aways to Huawei campuses have left messages of encouragement such as “Go Huawei!” and “You can do it, Huawei!”

The prison diary is careful to send good vibes to her captors, from the Alouette Correctional Center for Women, to her security entourage, to the staff of the court she periodically attends. All this, says Meng, has given her the strength to keep on keeping on. “I’m no longer afraid of the rough road ahead,” writes Meng. “While my personal freedoms have been limited, my soul still seeks to be free. Amidst these setbacks, I’ve found light in the life around me.”

While we have no reason to doubt Meng’s sentiments are anything other than heartfelt, the fact that Huawei chose to publish this letter on its propaganda site does make you question the thinking behind the whole exercise. Huawei is clearly on a publicity drive ahead of Meng’s extradition hearing next month and its PR people have also taken the trouble to flag up this fairly accommodating piece on the matter from a Canadian publication. If Huawei is hoping to generate sympathy for Meng’s plight it might need to be a bit more subtle than this.

Huawei mobilizes is North American legal team once more

Embattled Chinese telecoms giant Huawei is reportedly going to challenge a recent FCC proposal, while there have been developments in the trial of its CFO in Canada.

Last month US telecoms regulator, the FCC, indicated it wants to ban Chinese vendors from receiving any money from its Universal Service Fund. Last week it formally proposed new rules ‘to remove bad actors from commission programs’. Specific bad actors weren’t identified, much to Hollywood’s relief, but the rules were clearly made with Chinese vendors in mind.

Now, according to the WSJ, Huawei is preparing a lawsuit to challenge the decision, with a formal announcement imminent. On the surface legal action such as this seems utterly futile, since the entire US state is clearly hostile to Huawei. But the US is supposed to have an independent judiciary devoted to due process, so anyone should be entitled to the safe treatment under the law, regardless of the political environment.

Meanwhile Huawei will also be hoping for impartial legal treatment in Canada, where its CFO Meng Wanzhou is under arrest, pending extradition to the US to be tried for a bunch of alleged crimes. The extradition hearing is due to take place in January and the CBC reports that Meng intends to ague that the crimes she is accused of don’t even exist.

“Initiating extradition proceedings in these circumstances would undermine Canada’s sovereignty and its independence on the world stage,” Meng’s lawyers reportedly reckon. “It is simply not Canada’s role to enforce American foreign policy through our laws, especially when such foreign policy is diametrically at odds with our country’s chosen legal framework.”

The core of the defense appears to be around ‘double criminality’, which means the act has to be a crime in both countries for extradition to be permitted. They seem to be saying financial deception Meng is accused of can’t be a crime in Canada because the sanctions it was supposedly designed to circumvent were US, not Canadian ones.

DT in legal battle over ownership of the colour magenta

Deutsche Telekom is testing out the resourcefulness of its lawyers in an attempt to own the colour magenta as it battles with Israeli insurance start-up Lemonade.

Shortly after launched the online-only insurance brand in the German market, a court injunction was filed by the telco with Lemonade being told to remove all branding with the offending colour. It does seem quite remarkable a company can ‘own’ a colour, but that it was the German courts have ruled.

Although the ruling is limited to the German markets for the moment, Lemonade is escalating the legal fracas to the European Union Intellectual Property Office to invalidate the decision. As with many legal decisions of this nature, there is the risk of precedent being set, with this ruling being used as a basis for future decisions in additional markets, though Lemonade wants to cut the monopoly down before any momentum can be gathered.

“At first we thought it was a joke,” Lemonade co-founder Shai Winiger said on Twitter.

“Turns out its anything but funny. So, we’re doing the one thing they least expect, by launching a legal attack against the ability of corporations to own things that should belong to humanity as a whole – like colours.”

What is slightly baffling about this case is the free-reign Deutsche Telekom has been handed by the courts. The patent doesn’t seem to be related to the use of magenta with certain letters, a concept, design or services, it apparently ‘owns’ magenta in Germany.

Launching the hashtag #FreethePink, the Lemonade team is challenging what seems to be a remarkable decision. The legal challenge is also generating a handy amount of PR for the business, which has its eyes set on international expansion after a positive start to life in Israel.

And as one would imagine, support on social media is gathering behind Lemonade with several users suggesting new targets for the telco to chase after. Perhaps the Pink Panther will be tackled next, or the hideous and slightly terrifying Troll Doll should start quaking it its boots. Maybe even Barney might be hauled out of retired to defend his tone, or if Deutsche Telekom fancies bullying children, it could take-on the Power Puff Girls.

Of course, this is not the first time Deutsche Telekom has attempted to use its legal weight to bully start-ups who dared to cross its colour palette. Dutch IT firm Compello felt the legal stick over the use of pink in its own logo, while dataJAR in the UK was also a victim.

Interestingly enough, in the case with Lemonade, the firm has not even been using the shade of pink Deutsche Telekom holds the patent for.

DT currently owns the patent for RAL 4010, a shade which is incredibly similar to the one being used by Lemonade, but not exactly the same. Following the ruling out of Germany, Lemonade has received a colour wheel from the telco, pointing out the colours it cannot use, one of which would be more readily described as Purple.

Although it might seem baffling a corporation can ‘own’ a colour outright, hopefully there will be some common sense shown by the European Union Intellectual Property Office and DT will be put in its place.

Australia sues Google for misleading users over location data

The Australian Competition and Consumer Commission has taken Google to court over allegations that it misled consumers over the collection of their location data.

The ACCC reckons that from 2017 at the latest Google broke the law when it made on-screen representations to Android users that it alleges misled consumers about the location data Google collected or used when certain Google Account settings were enabled or disabled. In short the ACCC is claiming Google gave users insufficient information to ensure their location data wasn’t collected if they didn’t want it to be.

“We are taking court action against Google because we allege that as a result of these on-screen representations, Google has collected, kept and used highly sensitive and valuable personal information about consumers’ location without them making an informed choice,” said ACCC Chair Rod Sims.

The problem is that Android has multiple settings that need to be adjusted if you don’t want your location data collected and the ACCC is alleging that Google didn’t flag up all of them. That will have resulted in some consumers thinking their location data wasn’t being collected when it still was. At the very least it seems Google has been insufficiently clear in communicating with Android users about this stuff.

Underlying a lot of the current wave of litigation towards internet giants is the desire by regulators and governments to retrospectively address the personal data land grab that characterised the first decade or so of the modern mobile device. Free services such as Android and Facebook have always sought payment in kind through the collection of personal data but have usually been very opaque in the ways they have gone about it. Regulators are now trying to shut the stable door after the horse has bolted.

T-Mobile and Sprint convince Colorado to cross the picket line

The coalition of lawyers fighting against the $26 billion T-Mobile US and Sprint merger has gotten a little bit weaker with Colorado dropping out of the resistance movement.

After the Attorney General for Mississippi secured concessions from the duo, the same has been achieved by Phil Weiser, the Colorado Attorney General. It might be the long-way around, but it does appear T-Mobile US and Sprint are turning some heads with individual, state-level deals.

“The State of Colorado joined a multistate lawsuit to block the T-Mobile-Sprint merger because of concerns about how the merger would affect Coloradans,” said Chief Deputy Attorney General Natalie Hanlon Leh.

“The agreements we are announcing today address those concerns by guaranteeing jobs in Colorado, a state-wide buildout of a fast 5G network that will especially benefit rural communities, and low-cost mobile plans.”

The guarantees are somewhat ambitious. New T-Mobile, how the merged entity is currently being referred to, has promised to deliver 5G with minimum download speeds of 100 Mbps to 68% of the state’s population within three years, and within six years, this coverage will have to increase to 92% of the population.

On the rural side, 60% of Colorado’s rural population will have to have access to 5G download speeds of 100 Mbps within three years of the completion of the transaction, increasing to 74% within six years.

New T-Mobile will also offer new tariffs at lower prices. Should the company fail to meet these commitments it will face $80 million in penalties.

In meeting these concessions, New T-Mobile might face some challenges. Colorado is the eighth largest state in the US at 269,837 km² (the UK is 242,495 km²), with some pretty mountainous landscapes. That said, the population does seem to help these coverage commitments.

Colorado has a population of roughly 5.6 million people, of which 4.89 million live in urban locations. The state has 196 towns and 73 cities, with the five biggest accounting for roughly 1.6 million people (23% of total). Should New T-Mobile cover the ten largest cities with 5G within three years, it would have achieved roughly 38% population coverage, more than half of the commitment made to the State.

With Colorado being a highly urbanised population, only 13% are described as living in rural environment according to Rural Health Info, the equation does not look quite as daunting. Another element to consider is the spectrum assets which will be owned by New T-Mobile.

Although it has been toying with the high-speed mmWave spectrum bands, New T-Mobile will have the benefits of the 600 MHz spectrum offering greater range for meeting the concessions. This will not deliver the eye watering speed which has been promised in perfect scenarios for 5G, though it will aid the demands of network densification. During a trial in January, T-Mobile US claimed a 5G call over 600 MHz could reach 1000 square miles from a single cell site.

Interestingly enough, the merger will also offer access to valuable mid-band spectrum which Sprint has been boasting about for years. Sprint is currently hording licences for the valuable 2.5 GHz band, very similar to the mid-band spectrum airwaves which are being championed in Europe because of the more palatable compromise between speed and coverage. Combining these assets with the mmWave trials puts New T-Mobile in a pretty attractive position.

Alongside the conditions placed on New T-Mobile, Dish will also face its own demands following the completion of the $5 billion acquisition of Sprint’s prepaid brand to maintain competition levels across the country. Dish will have to maintain the HQ in Colorado for at least seven years, hire an additional 2,000 people to work on the wireless business and Colorado will have to be one of the first 10 states Dish launches 5G in. Failure to meet these conditions will result in $20 million in fines.

The win in Colorado is a significant one for New T-Mobile and adds to the momentum gained in Mississippi. In this southern state, New T-Mobile will have to deploy a 5G networ with at least 62% of the population experiencing download speeds of at least 100 Mbps. These numbers increase to 88% within six years of the completion of the merger, though 88% of the rural population will also have to be upgraded to 5G by this time also.

Although this is not the end of the lawsuit led by the New York Attorney General, Letitia James to block the merger on competition grounds, it adds a dent to momentum.

The prospect of tackling James and a herd of 16 Attorney Generals might have seemed like a daunting one, but the divide and conquer strategy seems to be working well here. If the T-Mobile US and Sprint lawyers can convince a few more into ditching the lawsuit, the threat looks significantly lessened.

While there are some states where applying the same conditions as have been negotiated in Colorado and Mississippi would be incredibly difficult, the lawyers don’t have to worry about them. Chipping away at the states where 5G deployment might be a simpler task would certainly lessen the threat being posed by the coalition. There only needs to be another three or four convinced to cross the picket-line and the support for the merger starts to look much more substantial.

Vodafone Australia and TPG told to wait three months for merger decision

The final arguments have been presented to the Australian courts and now Vodafone Australia and TPG will have to wait until early 2020 for the decision on whether the $15 billion merger will be allowed.

This is a saga which has the potential to cause some long-term friction between the regulator and industry. Wherever you are around the world, best-case scenario would be collaboration between all elements of the ecosystem, but it does appear this is far from the case.

In a court case which has been on-going for just over three weeks, Justice John Middleton will now take into consideration all the arguments which have been presented. Unfortunately for those who are seeking a swift conclusion to the litigious chapter will be disappointed. Justice Middleton has said to expect a decision in January 2020, or potentially February.

Australian Competition and Consumer Commission (ACCC) took the decision to block the merger between Vodafone Australia and TPG on the grounds it would negatively impact competition in the future. The telcos are arguing this decision should be over-turned, suggesting it is the only way to ensure competition in a world which is quickly being defined by convergent operations.

This is a decision which will certainly disappoint someone. As patiently as Justice Middleton could look, there is no middle-ground between the feuding parties. The regulator is effectively accusing TPG of lying and the Vodafone/TPG representatives are suggesting the watchdog is not living in the realms of reality.

Looking at the perspective of the ACCC, the regulator believes the merger would prevent a fourth mobile player from emerging in the country. This is of course presuming TPG still has the appetite to deploy a network, and considering the telco has said it does not, the regulator is making a bold assertion.

Another interesting statement made by Michael Hodge QC, the lawyer representing the watchdog, is that its persistence to block the merger is based on “regulatory paternalism”. This is effectively a more acceptable way of saying ‘we know what better for you than you do’.

On the other side of the aisle, Vodafone and TPG are questioning whether the ACCC is looking at the same conundrum.

TPG did have an interest in diversifying revenues to enter into the mobile space, it was potentially going to do a ‘Jio Job’ to cause chaos, but the Huawei ban effectively put an end to this. Huawei was being touted as TPG’s main supplier of network infrastructure equipment, though the Australian ban for the vendor made financially unviable to pursue the network deployment, according to the telcos.

“Indeed, on the Commission’s evidence, TPG dodged a bullet that the network that they were rolling out would have been one of the great white elephants of Australian telecommunications history,” said Peter Brereton QC, representing Vodafone Australia at the trial.

If you believe the telcos, TPG is no-longer interested in building its own mobile network. It is not a financially attractive. Should the ACCC’s blockage of the merger stand, Australia will continue with three mobile network owners, though Vodafone will be in a weakened position to compete with the likes of Telstra and Optus.

This is the question which Justice Middleton needs to ponder. What is the best course of action for enhanced competition in the future? Three strengthened, converged telcos, or a fingers-crossed situation that TPG will be able to source CAPEX to fuel its own network deployment.

There are of course good and bad arguments on both sides of the aisle. The ACCC is potentially right to push for a disruptive fourth mobile provider, though is it reading the environment correctly? The telcos are of course correct to pursue a more comprehensive converged player, three top-tier telcos is certainly favourable than a duopoly, but there might be some nuanced language over the TPG appetite for network deployment moving forward.

The risk which could emerge is potential animosity. The UK’s connectivity landscape suffered due to friction between BT and regulator Ofcom, and there is potential for the same outcome here. Vodafone Australia and TPG only have one thing on their mind right now; a tie-up to challenge Optus and Telstra. The ACCC has taken somewhat of a patronising and stubborn stance, and seemingly does not want to consider the opportunity for increased competition with three converged operations.

Neither party is willing to budge, and it seems the loser will have to swallow a lot of pride to ensure a smooth relationship in the future.