Free has relaunched hostilities: Xavier Niel’s operator is demanding up to 2.43 billion euros from Orange And Bouygues Telecom before the courts. At the heart of the conflict, subsidized smartphones, these mobiles offered at knockdown prices in exchange for a package with a two-year commitment, which Free equates to disguised consumer credit and a deceptive commercial practice.
Additional paradox, this offensive comes while the three groups are moving forward together in a consortium to buy SFR. Allies on the industrial issue, adversaries in court, they open a new chapter in a battle that started more than ten years ago and which could change the way the French finance their telephones.
Free against Orange and Bouygues: what is behind the 2.43 billion euro bill?
In the line of sight of Freethe very principle of the “1 euro” smartphone accompanied by an expensive 24-month plan. For the operator, the customer actually reimburses the phone in his subscription, without clearly seeing the price of the mobile or the cost of financing, which amounts to hidden credit.
Legally, this is decisive: in 2018, the Court of Cassation compared these arrangements to consumer credit operations, which must display an APR and respect a usury rate. In a precedent against SFRthe court of appeal had estimated that the subsidy could “hide the real cost of the telephone, push consumers to spend more without immediately measuring the cost and obscure the interest rate” which sometimes exceeded the legal threshold of 20.65%.
For a subscriber, the difference is concrete: a “subsidized” high-end smartphone paid for over 24 months via an expensive plan can be more expensive than a bare purchase combined with a plan without aggressive commitment.
Subsidized smartphones: what this standoff changes for your next plan
Beyond the legal, Free is targeting a strategic point: a customer equipped with a subsidized mobile remains captive to their operator for at least two years, which complicates commercial success. It is the opposite of the Free model, built on non-binding packages and smartphones sold separately.
To meet the demand for staggered payments, Free launched Free Flexa rental with purchase option over 24 months, billed separately from the package. On paper, the idea is to clearly separate mobile service and telephone financing. But this montage is itself contested by Bouygues Telecomwhich in turn attacks it as a deceptive practice, a sign that the line between transparent credit and disguised credit remains blurred.
In this context, subscribers must look closely at the total cost over 24 months: price of the telephone, price of the package, duration of commitment and possibility of canceling or changing offer without penalty.
Trial, takeover of SFR, alternative models: what should Free, Orange and Bouygues subscribers prepare for?
In terms of figures, the most advanced file aims Bouygues Telecom. Already sentenced in 2023 to around 310 million euros for the benefit of Freethe operator appealed, as did Free, which is now demanding between 805 million and 1.44 billion euros, compared to 612 million initially. Facing Orangeno decision has yet been made, but the estimate of the damage has increased from around 790 million to almost 1 billion euros.
This “inflation” is due to two factors: Free’s calculations have been refined and, above all, the subsidized offers have continued after 2023, increasing, according to him, the damage suffered. In total, the financial stake is between 1.6 and 2.43 billion euros.
At the same time, the standoff serves as a signal to the Competition Authority at a time when Free, Orange And Bouygues Telecom want to start again together SFR. By showing an open legal rivalry, Free seeks to prove that the capitalistic alliance does not translate into a sweet deal on the market.
If the judges largely followed Free, operators could be pushed to reduce, or even gradually abandon, classic subsidized smartphones, in favor of bare smartphones, explicit consumer credits or standard rentals. Free Flex. For subscribers, this would probably mean the end of the phone displayed at 1 euro, but a more readable bill and a simpler comparison between offers.