Two Australian mobile service providers, Global One Mobile Entertainment and 6G, have been smacked with penalties totalling $375,000 for false and misleading advertisements for mobile premium services (MPS).
The tough measures are part of a broader strategy implemented by the Australian Competition and Consumer Commission (ACCC) to assist in addressing problems in the complaints-ridden MPS industry.
In addition to the penalties, the court has ordered both companies to implement a compliance program to “ensure a better understanding of their rights and obligations under the Competition and Consumer Act 2010".
The Federal Court in Sydney imposed the penalties after both companies misled consumers into thinking they could “purchase the mobile service at a one-off cost when in fact the consumer was actually requesting access to an ongoing premium rate mobile subscription,” according to a statement from the ACCC.
Global One and 6G provide mobile premium services including ring tones, games and quizzes.
ACCC chairman, Graeme Samuel, said the matter was the latest in a string of nine successful ACCC outcomes against problematic conduct in the mobile premium services industry.
“The market is changing and newer technologies may see the end of many of these services. Traders in mobile content looking to make a quick gain by misleading consumers will find themselves in court facing significant penalties,” Samuel said in a statement.
According to the ACCC, the two companies mislead consumers through four television advertisements broadcast on both free-to-air and pay TV. They were broadcast at times that would have attracted the younger viewer, the court found.
The subscription services promoted were through advertisements for: the One Time ring tone by Justin Bieber; entry to a quiz with a prize of $100,000; the Space Invaders mobile phone game; and The Doodle Jump mobile phone game.
In addition to imposing fines, the commission vows to continually review the MPS Code and monitor changes in the technology and their impact on consumers.
Both Global One and 6G said they will appeal the court's decision.