France Télécom Ordered to Halt WAP Phones Sales

BOSTON (05/30/2000) - A French court today ordered France Télécom SA to stop selling its Wireless Applications Protocol (WAP) mobile phones from June 13 to Sept. 30. The decision came after Internet startup company Wappup.com SA filed suit against the telecommunications operator, accusing it of hindering competition by programming the phones to access the France Télécom Web site by default.

Wappup.com, an information services startup with designs on the market for WAP services in France, had complained to the Paris trade dispute court that France Télécom was abusing its market position by selling WAP phones preprogrammed to access France Télécom's Voila portal page by default. [See "Telco Giant, WAP Underdog Have Day in Court," May 23.]But France Télécom testified in court that the preprogramming did not prevent their users from accessing other Internet services. The court will allow the company to continue to preprogram the WAP phones, on sale since May 17, as long as it unlocks the preprogrammed settings upon request from users.

Wappup asked at a Paris trade dispute court hearing on May 23 to order France Télécom's mobile phone unit to stop preprogramming the phones, and to hold distributors and manufacturers such as Motorola Inc. and Alcatel SA responsible for contributing to anticompetitive actions. The latter complaint was deemed inadmissible by the court.

Wappup founder and Chief Executive Officer Antoine Duboscq said today's decision will be good for both companies.

"For France Télécom it will mean forcing them to be in the competition game, and that may be a good thing. For Wappup and other startups, it is simply the possibility to exist," he said.

In a press conference today, France Télécom's Frédéric Quéré said the company was "satisfied" with the decision and that starting in June, the company will, upon request from users, change the preprogrammed settings. France Télécom did not say it would suspend sales before June 13, since the court did not order the company to do so.

After September 30, after France Telecom puts its WAP phones back on sale, Wappup is free to refer the problem to a higher court or entity such as the ART (Autorité de Régulation des Télécommunications), the French telecommunications regulator, or to refer the issue to European authorities. The company has not yet decided whether to do this, however.

France Télécom, based in Paris, can be reached at +33-1-4444-2222 or on the Web at http://www.francetelecom.com/. Wappup, based in Paris, can be reached at +33-1-4244-1515 or on the Web at http://www.wappup.com/.

(Additional reporting by Peter Sayer.)

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