Paris Appeals court orders Orange to pay £227 million in compensation to Digicel

Paris Appeals court orders Orange to pay £227 million in compensation to Digicel
Written by:
Wajeeh Khan
19th June, 12:34
Updated: 19th June, 12:37
  • Paris Appeals court orders Orange to pay £227 million in compensation to Digicel.
  • Digicel to receive £164.50 million in damages and £61.60 million in interest.
  • Orange inked exclusivity agreements with repair shops and independent distributors.

The Paris Appeals court ordered the French multinational telecommunications company, Orange S.A. (EPA: ORA) on Friday to pay roughly £227 million to its local competitor, Digicel Group, in compensation for its practices that threatened fair competition in the French Caribbean. Digicel also received approval from stakeholders and legal authorities for its £1.29 billion debt reduction plan on Friday.

Shares of Orange are currently 2% up on Friday. At £9.66 per share, the Paris-headquartered company is roughly 20% down year to date in the stock market after recovering from a low of £8.52 per share in March. Learn more about how to invest in the stock market.  

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Digicel to receive £164.50 million in damages and £61.60 million in interest

According to Capital magazine’s report on Friday, the ruling requires Orange to make £164.50 million payment to Digicel in damages on top of an additional £61.60 million payment in interest. The report has already been confirmed by the spokesman of the French telecom operator.

Orange’s spokesman also highlighted on Friday that the financial penalty marks the largest that has ever been imposed on a Paris-based company. The telecom firm is now exploring the pros and cons of appealing against the verdict in the Cour de Cassation (France’s highest court).

The first ruling for the ongoing litigation was released in 2017, following which, state-controlled Orange had transferred £313.65 million to an escrow account. The money, as per the company, was dedicated to cover the compensation-related expenses.

The origin of the case is rooted in the early 2000s, when the telecom market in French Guiana, Guadeloupe, and Martinique, was primarily dominated by Orange.

Orange inked exclusivity agreements with repair shops and independent distributors

In 2009, France’s antitrust regulator found substantial evidence that Orange inked exclusivity agreements with repair shops and independent distributors aimed at making it difficult for its rivals, including Digicel, to compete in these markets. Consequently, Digicel filed a lawsuit to seek damages.  

Digicel is yet to make an official statement on Friday’s news.  

Founded in 2001 by Irish businessman Denis O’Brien, Digicel is headquartered in Kingston, Jamaica and operates in 33 markets located in the Asia Pacific, Central America, and the Caribbean.

Orange performed slightly downbeat in the stock market last year with an annual decline of about 7%. At the time of writing, the French multinational telecommunication corporation has a market capitalisation of £25.69 billion and a price to earnings ratio of 10.41.

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