Court of Cassation Challenges Subsidising of Mobile Handsets in France

The Court of Cassation has challenged the system of subsidising mobile handsets, stating “the definition of a credit transaction, [.] covers, in particular, all payment facilities” and that the company involved “is indeed required to apply the provisions of the French consumer code that behoves all professionals offering payment facilities to their clients”.

The decision made by the court therefore makes it impossible, without complying with the rules governing consumer credit loans, to allow payment for telephone handsets to be spread over time as part of a mobile phone contract. The recognition of subsidies as a form of consumer credit could nullify certain contracts. Free Mobile said that as a result of the decision, it will now be able to compete in a previously inaccessible market of 17 million people currently tied in to this kind of contract.