EU Court Rules Maximum Duration for Mobile Contracts is 24 Months

The European Court of Justice (ECJ) has confirmed that mobile phone contracts for consumers cannot exceed a duration of 24 months. This ruling impacts all customers, including those already under contract, marking a significant victory for consumer advocates against Vodafone Germany.

This legal dispute has been ongoing, having progressed through various courts, including the Federal Court of Justice and back to the Düsseldorf District Court. The case arose from Vodafone's attempts to bind German consumers for periods longer than the stipulated 24 months.

In one instance, a customer sought to upgrade to a subsidized smartphone before the expiration of their initial contract. To do so, they agreed in 2018 to enter into a 'new contract' with higher fees that included a clause stipulating a new 24-month minimum term starting immediately after the original contract's expiration. This arrangement effectively extended the customer's commitment beyond the allowed time frame.

Another case involved a consumer who signed a document entitled 'Contract Renewal' just two months before the original contract's end date, which set a new term of 26 months, again with increased costs and a new device. This practice led to legal action initiated by the Berlin Consumer Protection Agency against Vodafone.

The previous version of the Universal Service Directive established a maximum 'initial minimum contract duration' of 24 months, a guideline integrated into German telecommunications law. Vodafone contended that agreements made for contract extensions with existing customers did not fall under the definition of 'initial' and only related to the first contract signed with a consumer.

While the Düsseldorf District Court initially favored Vodafone's interpretation, it ruled against the operator for other reasons. Both parties appealed, and the Higher Regional Court rejected Vodafone's argument. Subsequently, the Federal Court of Justice referred the matter back to the original court for further factual clarification. The case returned to the Higher Regional Court, which identified two possible interpretations of 'initial minimum contract duration': whether it pertains solely to the first contract or includes subsequent agreements.

The Higher Regional Court then sought a preliminary ruling from the ECJ, which recently decided in favor of consumer protection and competition. The ruling clarified that the term 'initial minimum contract duration' applies to both the duration of the first contract and subsequent contracts between the same parties, thus prohibiting any follow-up agreements from exceeding a minimum duration of 24 months, even if signed before the original contract's expiration.

The ECJ examined various linguistic versions of the directive and determined that the wording across multiple languages, including Spanish, German, Greek, English, and French, indicates that the adjective 'initial' refers specifically to the 'minimum contract duration' rather than the contracts themselves. Therefore, the maximum duration of 24 months applies to both the initial contract and any subsequent agreements.

Contrastingly, other linguistic versions, such as the Italian and Portuguese, could be interpreted to apply only to the initial contract. However, the context and purpose of the directive, which aims to facilitate consumer choice among service providers to enhance competition benefits, were decisive.

The current version of the Universal Service Directive (Directive 2002/22/EC) has since been updated within the Electronic Communications Code (Directive (EU) 2018/1972), which explicitly states that telecom contracts with consumers should not include a minimum duration exceeding 24 months, except in cases of machine-to-machine communication.

German law has consistently referred to the 'initial minimum contract duration' in its telecommunications regulations, indicating that any contract's duration must not exceed this limit. The case is set to return to the Higher Regional Court in Düsseldorf, where a decision is anticipated that will likely favor the consumer advocates from the Berlin Consumer Protection Agency against Vodafone.