Europe's major mobile operators have lost a court appeal against the European Union roaming price caps. Vodafone, Orange, Telefonica O2 and T-Mobile brought the case against the UK government, which referred the issue to the European Court of Justice. Mobile operator 3 UK, Ofcom and the GSM Association were also named interested parties in the suit. The mobile operators challenged the introduction of price caps on roaming services within the EU in 2007 on the basis of three grounds, namely that the regulation's legal basis is inadequate, it is disproportionate and it offends against the principle of subsidiarity. The ECJ rejected all three claims. The court found that as the aim of the roaming regulations was improving the functioning of the internal market, the legislation could be adopted based on Article 95 of the EC Treaty. The principle of proportionality requires that EU legislation must be appropriate to acheiving its objectives and not go beyond what is necessary to achieve them. The operators had questioned whether it was necessary to impose retail price caps, in addition to wholesale price limits. The ECJ again sided with the European Commission, saying it was clear that wholesale price cuts would not likely be passed on to consumers, and in the interest of consumer protection, the retail price caps were a legitimate measure. Subsidiarity requires the EU to limit its legislation to measures that national governments and regulators would be unable to implement with the same effect. Citing the interdependence of wholesale and retail prices, the court said that national retail price measures alone would have been unable to achieve the same effect and could have led to disruptions to the internal market for roaming services. The European Commission said it welcomed the court ruling and expects to deliver an interim report on the functioning of the roaming regulation by the end of June.
