Nazi `Downfall' Video Leads to $6 Million Windfall for Iliad

(Bloomberg) -- Apparently, you can do worse than comparing your industry rivals to Nazis.

Competitors to Iliad SA’s Free Mobile’s competitors were offended when the upstart French phone company released a parody video in 2012 based on the film “The Downfall” -- retracing the last days of Adolf Hitler -- and depicting the three main French operators as officials of the Third Reich.

“My clients should remain cash cows and accept paying through the nose,” one of the Nazis was quoted as saying in the video.

Iliad’s competitor SFR Group SA sued, and in a previously unreported ruling, the Paris Commercial Court decided Jan. 29 that Free’s video had disparaged SFR, and awarded it 20 million euros ($25 million). Iliad countersued, saying the rival had publicly disparaged its service when Free entered the French market, and the judges awarded it 25 million euros.

The Paris judges ruled that a video comparing SFR to a Nazi -- a person guilty of war crimes -- is “particularly serious.”

But they also had issues over how SFR belittled the products and services of Free Mobile.

This “necessarily had a negative impact on the image of Free Mobile in 2012,” the judges wrote, highlighting a 2015 poll that put forward the Iliad unit’s bad image to explain the lack of subscriptions at the operator.

Iliad shook up the French market in 2012 with low-cost wireless offers starting at 2 euros a month that helped it lure subscribers from incumbent operators such as SFR, Orange SA and Bouygues Telecom. Altice NV bought SFR from Vivendi SA -- in two steps -- for around $21 billion during 2014 and 2015.

SFR declined to comment, while Iliad didn’t immediately respond to requests for comment. During the Paris court case, SFR sought a total of 493 million euros from its rival, while Free asked for 563 million euros in compensation.

To contact the reporters on this story: Gaspard Sebag in Paris at gsebag@bloomberg.net, Alexandre Boksenbaum-Granier in Paris at aboksenbaumg@bloomberg.net.

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Phil Serafino

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