The Cutting Room: Gateways, ‘CE’ marks and EU law


What does the Portuguese case, involving GSM Gateway operator Linkway and network operator Optimus (see page 18), mean for the UK?

Much more than you might expect. The GSM standard would not exist without European Union cooperation. So one may conclude that European law covers both telecoms and, particularly, matters relating to equipment that can be used on GSM networks. 

If a court in one member state takes the view that either EU competition law (Article 82), CE-marked equipment standards law (R&TTE directive), or more general telecoms law (covered by several directives), permits GSM Gateway use and damages are owed to GSM Gateway companies, then this could be taken into account in the UK. 

Germany appears to be heading this way.

If the UK court then takes a position different to the other member state court on similar information, then one can expect the European Commission to ask the UK what is going on. 

The European Commission has the power to force action in the European Court, at its expense, to confirm the rights given to UK citizens under the EU Treaties, to which the UK Government signed up.

The concern that GSM Gateway operators would run out of cash therefore evaporates, and all the network operator money in the world, which might be expected to crush a few small GSM Gateway companies, will not be enough as the temperature rises and the stakes become higher. 

The European Commission can take the UK authorities to the European Court, which can force compliance – meaning a win for the UK’s defunct GSM Gateway companies. 

The potential also exists to fine the networks up to 10 per cent of their turnover if they are found to have broken the law.  It was Article 82 that caught Microsoft.

Suddenly the whole matter has got a whole lot more serious for the mobile networks, and those who sided with them in this whole fractious affair.

Given the imminent Court of Appeal decision in the UK (covering only a small part of the infamous Floe Telecom case), and various other cases recently reported on these pages, those who have attempted to block the delivery of low cost services may conceivably find themselves in hot water.

As can be seen from BT’s new saver tariff, some network operators have been drastically cutting the cost of calling mobiles from landlines whilst others are happy to retain the commercial status quo. 

This issue is hotting across Europe – and the UK is not immune to the fallout. UK Courts are bound to obey European law, and the European Commission has delivered lower prices on roaming already, so its position looks clear. 

Ofcom’s position appears much more hazy.