The Full Federal Court has dismissed an appeal by two Australian providers of mobile premium services, Global One Mobile Entertainment Ltd and 6G Pty Ltd, against an earlier court decision that certain advertisements were misleading or likely to mislead consumers about continuing premium rate mobile phone subscriptions.
The Federal Court strongly supported Justice Bennett’s findings of contraventions and penalties totalling $375,000.
“The decision of the Full Court in this matter should serve as a reminder to any mobile content providers looking for quick gains by misleading consumers that they could be facing significant penalties,” ACCC Chairman Rod Sims said.
Global One and 6G provide mobile premium services including ring tones, games and quizzes. Both Global One and 6G represented that a consumer could purchase these services at a one-off cost when in fact the consumer was actually requesting access to an continuing premium rate mobile subscription. Among others, this included the ring tone for the Justin Bieber song, “One Time”.
The advertisements were broadcast on both free-to-air and pay TV. These advertisements were broadcast at various times including during television programs that would have attracted the younger viewer.
The Full Court found that “each advertisement is plainly designed to operate as a hook to induce a consumer to respond” and that “there is no basis to conclude that the post publication steps in the double opt-in continuum dispels the misleading or deceptive conduct arising out of publication of the advertisements.”
“This is the culmination of a significant program to deal with the level of complaints about mobile premium services. The ACCC and other agencies have used a range of tools to address the issues, resulting in a decline in complaints and consumer harm,” Mr Sims said.
The ACCC’s strategy and outcomes achieved in the mobile premium services industry are set out in Mobile premium service: meeting the challenges – A case study.
The ACCC instituted proceedings in October 2010. In June 2011, Justice Bennett found that all four advertisements were misleading or deceptive and made false representations as to price. Remedies ordered included declarations, injunctions, a compliance program, costs and pecuniary penalties totalling $375,000.
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.