SmarTone loses court case to stop HKT from viewing iPhone contract

PUBLISHED : Wednesday, 05 March, 2014, 4:04am
UPDATED : Wednesday, 05 March, 2014, 4:04am

SmarTone Mobile Communications has lost its bid to stop the senior management of rival Hong Kong Telecommunications from viewing an redacted iPhone agreement it signed with Apple.

It was SmarTone's second defeat over the issue in one day, after it did not get permission to lodge a judicial review of three decisions from a telecommunications appeal board, including the one that allowed inspection of the contract.

Both rulings, made in the High Court yesterday, effectively allows five senior management members of HKT to read the contract.

Mr Justice Peter Ng Kar-fai said SmarTone had not put forward "reasonably arguable" grounds for challenging the decisions of the Telecommunications (Competition Provisions) Appeal Board.

Ng also rejected SmarTone's challenge that the board chairman had failed to give adequate reasons for his decisions, made on February 19 and 25.

"The reasons are intelligible and in the circumstances adequate," the judge wrote.

Earlier, HKT had asked the appeal board to rule on whether a SIM lock installed by Apple on its iPhone 5 and iPad raised an anti-competition issue.

The lock prevents HKT subscribers from accessing its 4G/LTE network. HKT wants the board to order Apple to remove it.

The board let the HKT management view the iPhone contract so they could instruct their lawyers on the anti-competition case, court documents showed.

Apple Asia provided the board with the contract after removing commercially sensitive figures, such as commitments on minimum orders, amount of advertising, merchandising funds, and subsidies committed by SmarTone, the documents showed.

Nevertheless, SmarTone claimed the contract still held commercially sensitive details and should not be passed to HKT unless more parts were cut out.

The chairman of the appeal board said that after examining the agreement, he could "discern no quality of confidentiality to justify further redaction".

On February 28, SmarTone applied for the court order to suspend the decision and for the judicial review. The High Court heard its applications behind closed doors.