Massive Canadian Class-Action Cellphone Suit Is Approved

BeanBunny writes "A Saskatchewan, Canada court has ruled that a $12 billion class-action suit can proceed. The suit alleges that 'system access fees' that the cellphone companies have charged ($7-9 per month) are unfair and constitute price gouging. 'It is described as the largest class-action in Canadian history, potentially affecting every cellphone user in the country. Currently, there are 7,500 complainants signed onto the suit.'"

Comments

Classic Bait & Switch

[ivormi]

This is classic bait and switch tactics... Advertise one price, and then hit the customers with another. Their only real justification is that 'everyone else is doing it' and that not doing so would put them out of business. Its about time something like this came along.

no-win

[tomstdenis]

Assuming the lawsuit is successful, they'll just roll the $7 fee into the base price for ALL of their plans. So my $20/mo plan will become a $26.95/mo plan. Big whoop.

Wake me up when they stop charging $0.10 per SMS, or $0.05 per KB. I mean why is it they can afford me calling my friends after 6pm which uses roughly 9.6kbit/sec for FREE (well unlimited), but I can't send a 200 byte SMS without incurring a 10 cent charge no matter the time of day.

Cell phones are basically a license to print money. And since Rogers and Bell are basically monopolies they can charge [and do] whatever they want. If you look at Rogers previous earnings reports, the wireless division has been making tons of profit for a long time. So strictly speaking the high fees are NOT required to stay in business, they're just fucking greedy.

Re:no-win

[whoever57]

Assuming the lawsuit is successful, they'll just roll the $7 fee into the base price for ALL of their plans. So my $20/mo plan will become a $26.95/mo plan. Big whoop.

Maybe they will roll it in, maybe not. Thee is clearly an advantage in deceiving their customers, or they would not do it. If the current monthly cost is (for example) $30 (plus a fee of $7), how many fewer will sign up if the service is priced at $37/month? Clearly some will not sign up. Perhaps the companies will find it advantageous to charge something between $30 and $37/month.

In any case, I wonder how those 2 year contract (if that is typical in Canada like it is in the US) might come back to bite the providers if they have to keep providing service for the remainder of the contract, but MINUS the "access fees"?

Re:no-win

[Anonymous Coward]

So my $20/mo plan will become a $26.95/mo plan. Big whoop.

Yes, but then they would need to advertise the $26.95/mo as being $26.95/mo. Currently, their "$26.95/mo" is advertised as "$20/mo", and then they tack on extra fees.

Competition doesn't work when many of the extra fees are hidden from, as comparing plans becomes more difficult.

If all carriers were required to advertise the true price, another company might try to attract customers by offering the same product at a lower price.

Re:no-win

[nahpets77]

What about long distance? Why do they still charge long distance rates in this day and age where you can access sites anywhere in the world via internet? They also these weird rules like if you're roaming in another city, and someone local calls you, you pay long distance. But, if you call them, you don't because you'd be calling the same area code. How can long distance be charged depending on who intiates the call, even though you're physically in the same location in both scenarios. In any event, cell plans in Canada suck and are expensive for nothing. I even have to pay an extra $5 dollars with Rogers to get call display, a feature I got with my first cell plan years ago for free.

Re:no-win

[That's Unpossible!]

strictly speaking the high fees are NOT required to stay in business, they're just fucking greedy

No shit.

Everyone is greedy -- you, me, the companes -- that's how markets work. You're "greedy" in that you don't want to spend much money. Businesses are "greedy" in that they want to keep their prices as high as possible. A group of you get together and the optimum price point is reached, balancing resources, competition, supply and demand.

Only when governments get involved do things get royally fucked up.

"But, but but what about monopolies??" is the next sentence out of your mouth.

Monopolies that are not maintained by the government are eventually eroded by market forces.

"But why shouldn't we use the power of government to erode all monopolies prematurely?"

This is a difficult question, but what it comes down to is ... freedom. Every power you give to the government erodes your freedom, and they aren't giving that power back, ever. Choose wisely.

Re:no-win

[Kineticabstract]

That's a very pat answer - and a typical reply for those who worship at the altar of "free market". In your world, this is a simple supply/demand equation, and the answer is very black and white.

The problem is, there's a huge difference between "reasonable pricing" and "too high, but I have to pay it if I want the service". One is fair, the other is borderline extortion. Ask my cable provider about that one. I can choose to not have any cable, or I can choose to pay too much. My choice. I grant you that it's a luxury rather than a necessity. After all, I could choose to live in my car to save on rent, or walk four hours to get to work rather than pay my car payment. Life is a continual, delicate balance between what we want and what we need, and it's all just a matter of prioritizing.

The issue with the cell phone providers is this: While I can choose a different provider and pick the cheapest plan I can find, in my opinion ALL of the available plans are over-priced. I go with the cheapest plan that I can while still having what I'd call a reasonable service. Still, it takes a large chunk out of my take home pay. They're walking that fine line of charging me enough to make obscene profits, while not charging so much that I simply can't squeeze the money out of my paycheck. Another fine example of corporate America doing what it can to keep the shareholders and CEOs happy at the expense of the average worker. It's called greed, and greed is what makes your lovely little free market work so well--at least for those who sit at the top of it.

In the supply/demand equation, price should go down if supply goes up. For the cell phone companies, supply simply isn't an issue. Demand only comes into play at the bottom line. The old formulas don't apply here.

Re:Just because I have to

[king-manic]

So thats what... $5, $6 American?

Currently just a few cents under parity. Wait a year and you may be looking at 1.25 greenbacks per loonie. As the trend has gone that way. We went from ~0.69 greenbacks per loonies to 0.98 greenbacks per loonie.

Re:Just because I have to

[trolltalk.com]

> Yep, and Canadian products will become more "expensive" to Americans (therefore, less goods are sold). Additionally, US products will become cheaper for Canadians (therefore, more of our goods get sold to you)....

You seem to forget, we're your #1 supplier of petroleum products. You really don't have a choice if we raise prices to match domestic prices, since we supply the equivalent of 1 Katrina of oil, and there isn't enough slack in the world, never mind enough oil tankers, to make up the difference.

You *could* stop using up so much of it, which is what will probably happen as people stop over-spending and are unable to borrow against their home's declining values.

Re:Just because I have to

[Dragon of the Pants]

1.00 CAD = 0.985699 USD Not even 1 and a half cents difference per dollar. And the way things are going, we'll be the ones making fun of the American dollar soon enough.

Re:Price control

[gurps_npc]

Your comment is not interesting, despite what someone tagged it. It is instead an off topic comment that tries to change the focus from the real wrong to greed.

Price gouging is not illegal except in certain circumstnaces. I.E. It is price gouging only if there is some kind of emergency going on.

Same for predatory pricing. To be predatory pricing it must be an attempt to remove a smaller competitor and the bigger company must be taking a LOSS on the price.

Price fixing only occures when an actual agreement occures not to compete on price. ---------------- But all of that is crap, because the lawsuit is NOT about the price Yeah, the consumers want the lower price, but that is not what the legal action is about at all. This particular case should really be called false advertising. They advertise one price and then really charge you a higher one. That is wrong ALL the time. No if's, no and's, no buts.

Re:no-win (for us)

[Black Copter Control]

There is no financial reason why a provider can provide unlimited voice calls but must charge $0.15 for an SMS message. Yes, there is --- Profit!

Re:Just because I have to

[pnewhook]

Over the last 8 years it's lost about 30%-50% of it's relative value against other western currencies. It happens to coincide with a strong Canadian economy which leads to the 50% gain the loonie has had over the greenback in the last year.

8 years also happens to coincide with GW Bush presidency. But spending $200 million PER DAY on a war couldn't possibly have any effect on the economy now could it..

Re:no-win (for us)

[dgatwood]

Now whose fault is that? The phone companies. We're going to all charge each other money for these connections that don't really cost us anything. That way, we can charge our customers to "cover our costs". It's brilliant.

A rip-off is a rip-off whether it is perpetrated by a single company acting alone or by the whole lot of the slimy dirtbags.