Lebara Mobile Ltd v Lycamobile UK Ltd [2015] EWHC 3318 (Ch)).
On 17 November 2015, Nicholas Lavender QC, sitting as a Deputy High Court Judge dismissed an application by Lebara for an interim injunction that had been sought by Lebara to prevent what is known as the “blocking” of Lyca customers, that prevented the access by Lyca’s customers to Lebara’s websites over Lycamobile’s mobile network.
The block included a block on a Voice over Internet, or “VoIP”, service that had recently been launched by Lebara in a number of jurisdictions (but not in the United Kingdom), called “Lebara Talk”. Lebara Talk permits users to make free calls over their data connection provided by Lyca and Lyca considered that this enabled Lebara to, in effect, free ride on Lyca’s network.
Lebara has commenced proceedings alleging numerous causes of action under English and certain EC laws. Under English Lebara alleged, in particular, conspiracy to injure, interference with its business by unlawful means, unlawful means conspiracy and a direct claim under the Privacy and Electronic Communications (EC Directive) Regulations 2003 (“the E-Privacy Regulation”).
The case raises issues that will in due course be addressed by the forthcoming EU “net neutrality” regulation. This regulation, which is expected to come into force in April 2106, will, with certain exceptions, require internet service providers to treat all traffic equally and will place restrictions on the ability of entities who provide internet access to manage web traffic.
The learned Judge concluded that, in material respects, there were serious issues to be tried on the claims made by Lebara. However, he had real doubts as to whether the block would cause Lebara would suffer significant uncompensated loss in the light of, in particular, (i) the fact that the evidence was that Lebara Talk was growing “rapidly” in the jurisdictions in which it had been launched and there was no evidence that it had not achieved its projected growth; (ii) many of Lyca customers did not use data services or did not own; Apple or Android smartphones, which are the only platforms which Lebara Talk operates on; and (iii) the potential customers were “tech savvy” and were still able to access Lebara content on a desktop computer or a mobile device over WiFi.
As a result, while he was not prepared he dismissed the claim for an injunction simply on the basis that damages were an adequate remedy, he concluded, in the light of the period of time that the block had been in operation and the relevant status quo, and on the basis that Lyca gave an undertaking that the Block would be limited to Lebara Talk, the balance of convenience was against granting the injunction.
He also dismissed an application for an order requiring Lyca to make statements on its website about the block.
The judgment is of a particular interest for: (i) the fact that, while the learned Judge did not have to decide the point, and notwithstanding the decision in Microsoft Corpn v McDonald (trading as Bizads) [2007] Bus LR on Regulation 22 of the E-Privacy Regulation, he doubted that Regulation 7 of the E-Privacy Regulation provided Lebara with a direct cause of action; (ii) the learned Judge’s analysis of the approach to be adopted when considering applications for mandatory interim injunctions in light of National Commercial Bank of Jamaica v. Olint Corpn [2009] 1 WLR 1405; (iii) the learned Judge’s comments on the effect of the so-called ‘presumption of similarity’ between UK and foreign law, and the relevance of the decision of the Court of Appeal in Alfred Dunhill Ltd v Sunoptic SA [1979] FSR 337 to claims based for breach of foreign contract laws and on breaches of EU directives in the light of OPO v MLA [2015] EMLR 4 and Brownlie v Four Seasons Holidays Inc [2015] EWCA Civ 665.
Jeffery Onions QC was instructed by Jones Day for Lyca, together with Robert O’Donoghue and Tom Pascoe of Brick Court Chambers.
The full copy of the judgment can be found here.