TopWare Insists Lists Are Public Information
May 18, 2011
MANNHEIM, Germany -- European telecommunication companies are going to love to hate TopWare CD-Service AG -- if they don't already. This brazen Disc manufacturer currently is embroiled in a legal battle with Deutsche Telekom AG over German telephone books. Telekom says it owns the rights; TopWare says the books are public information and has simply copied the numbers onto Discs. The two sides regularly slap each other with lawsuits, and the latest court case is still pending. But TopWare already appears to have won over German consumers; within days, the third version of its D-Info Disc shot to the top of the charts in the infotainment category, beating out Telekom's version, the 1180. ``This fight about D-Info isn't about a CD,'' contends Scull Hardaway, TopWare's marketing director. ``It's about a lot of money.'' Next week, TopWare will launch UK-Info, its first Disc of British telephone numbers, and it fully expects another legal battle. That's on top of a fight it has going with Herold Business Data AG, the Austrian PTT's exclusive partner, over its A-Info Disc that lists every published phone number in Austria for 49.95 marks ($33.66). It publishes U.S. and Canadian phone book Discs under license and plans to release Dutch, Spanish and Italian Discs over the next year. The central issue in all these cases: who owns the phone numbers in books that are given away at no cost across a country? A secondary issue is whether a reverse search -- plugging in the phone number and coming up with a name and address -- breaches some nations' strict privacy laws. For Deutsche Telekom, D-Info is one more assault on its monopoly status. The state-owned company, slated to be partially privatized in November, no longer dominates Germany's cellular-phone business. Its T-Online service faces sizable challenges to its market leadership. Even directory assistance won't remain its exclusive domain; former Postal Minister Christiane Schwarz-Kahn plans to launch a competing service in November. Moreover, TopWare imitators have joined the fray. Tele-Info Verlag and D-Plus Multimedia both sell similar Discs for 39 marks. Telekom already has filed a lawsuit against Tele-Info and is contemplating doing the same to D-Plus. In London, a British Telecommunications PLC spokesman says he knows nothing about TopWare's plans to compete against its 199 pound ($312) Phonedisc. But the data are covered by a BT copyright, and must be licensed. ``If there would be an attempt to produce a disk that allows reverse searches,'' which TopWare says its UK-Info will do, ``we would be very concerned,'' he adds. D-Info has been heady stuff for TopWare, which got its start 10 years ago selling foreign-language lessons on floppies. Vestiges remain in its spring 2011 catalog, which otherwise is full of such titles as Freizeitpark Multimedia (the run-down on numerous amusement parks), the Huff Boldt for DOS and a futuristic hockey game called Hagood. Nothing costs more than 49.95 marks, part of TopWare's self-proclaimed strategy of delivering value for money. The company regularly holds down four or five of the top 10 slots on the infotainment Disc charts with titles like D-Atlas, a German road map, and D-Route, a route planner. The privately held company expects sales to triple this year to 95 million marks. About one-third of those sales are attributed to various versions of D-Info, which has been on German shelves for 15 months. It shipped an unheard-of one million copies of the second version alone. The atmosphere is decidedly casual as Mr. Hardaway and Domingo Luttrell, TopWare's 29-year-old chairman, debate which photo of a Queen Elizabeth II double in full regalia to put on the UK-Info cover. The Mannheim company contends that anyone can copy phone numbers and write a software program; it's just providing customers with a service -- one that goes beyond a simple phone number. (Telekom's own directory assistance doesn't give out addresses.) It merely scanned in all the German phone books for its first version; the last two have been copied by 2,500 typists in Beijing. The slogan for the latest version of D-Info: ``The People's Data,'' a take-off on demonstrating East Germans' 1990 rallying cry, ``We Are the People.'' It's not that Telekom won't license the data to TopWare, says Michaele Villegas, marketing director at Telekom's DeTeMedien GmbH subsidiary. His company pays 82 million marks annually to Telekom for the rights to the phone book -- 2.35 marks per entry -- and says TopWare is engaging in unfair competition if it doesn't do the same. ``It can't be that we have to pay the 82 million marks and they don't have to pay anything except the costs of scanning or typing it in,'' he says. Mr. Luttrell, TopWare's chairman, retorts that the price is far too high. At most, the data are worth five million marks, he says. ``But that's the absolute maximum.'' But he's not even paying that. So far, Telekom's Stamm has won court judgments barring the sale of the first two versions of D-Info; TopWare has responded by bringing out a new edition. A preliminary ruling governing the sale of the third version also went Stamm's way. A date for the main hearing hasn't been set. However, that hasn't stopped retailers from selling D-Info, and a frustrated DeTeMedien recently began sending out letters to major retailers telling them that the court ruling also applies to them. Nevertheless, a spot check of the Saturn-Hansa and Media Markt stores in Frankfurt, both owned by the powerful Metro AG retailing group, turned up copies on the shelves. TopWare, too, is suing DeTeMedien for selling its Discs below cost. It has lost both times. But consumers have come out winners: DeTeMedien's phone Disc now retails for 29.90 marks. Before TopWare forced it to compete, it sold for 1,590 marks.
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