Vodafone is faced with a lawsuit from consumer advocates - financial expert explains background and consequences.

Vodafone is faced with a lawsuit from consumer advocates - financial expert explains background and consequences.

According to a report by www.zeit.de,
The telecommunications provider Vodafone is facing a lawsuit from consumer advocates because of price increases for fixed-line Internet. The Federal Association of Consumer Organizations (vzbv) announced that increasing the price of current contracts is not permitted.

Vodafone's price increases in the spring affected all fixed-line tariffs for cable and DSL, with the monthly price being increased by five euros. Around ten million customers were affected, and the main reasons for the price increases were higher costs for energy and materials.

The lawsuit at the Hamm Higher Regional Court is based on the new federal law, which only came into force in mid-October. This allows Vodafone customers to take part in a new form of class action by entering into a lawsuit register.

The consumer advocates are of the opinion that a special right of termination that Vodafone has granted to customers is not enough. They argue that the price increases for ongoing contractual relationships should not have been unilateral, without renegotiations with customers.

A defeat for Vodafone in this case could result in a repayment of five euros per month to each affected customer. Depending on the number of customers involved, this could be financially painful for Vodafone and could also have a chilling effect on other telecoms providers considering similar price increases.

This class action lawsuit not only has an impact on Vodafone, but could also have a signaling effect for the entire telecommunications industry when it comes to price increases for current contracts.