An ACCC CASE STUDY
Mobile premium services: meeting the challenges
Overview
The Australian Competition and Consumer Commission (ACCC) is an independent statutory authority that promotes competition and fair trade to benefit consumers, business and the community. Each year the ACCC receives numerous complaints and inquiries from consumers
and businesses.
From 2004 to 2010 there were 4300 complaints and inquiries to the ACCC, representing around 1 per cent of all contacts, related to mobile premium services. Consumers were reporting unexpectedly high phone bills, some in the thousands of dollars, related in the main to premium rate subscription services.
For the ACCC, these escalating complaints and associated consumer harm called for an integrated and flexible response that combined the ACCC’s key compliance functions—education, persuasion and enforcement. As the industry was largely self-regulated and this had not had a visible impact on industry compliance, the ACCC also saw that it had a role in providing strong input into regulatory change to reduce long-term harm.
The approach proved successful and outlined below is a case study of how it was implemented.
The case study outlines:
•	the main challenges, related problems and associated harm as it had been presented to the ACCC from complaint data, discussions with individual consumers, other regulatory agencies as well as industry and consumer groups
•	the multi-pronged approach taken by the ACCC in addressing the problems and related harm
•	the key outcomes achieved.
The ACCC was only one of a number of regulatory and industry and consumer bodies that have worked towards addressing the problems in this industry.
Mobile premium services—brief industry background
Mobile premium services operate via short code mobile phone numbers with a ‘19’ prefix, charged at a premium rate and include competitions, voting, horoscopes, weather, ringtones and games.
Costs range from 55c for many of the popular voting or competition services to around $10–$15 for ringtones or games. Some services incur a one-off payment, while others are subscription services where paid content is delivered regularly. Charges are made directly to the user’s phone bill or via a pre-paid account.
The providers
A chain of providers is responsible for delivering many of the services—the content provider or creator of the service, the ‘19’ premium number aggregator who is responsible for managing the ‘19’ premium number and the consumer’s telecommunication carriage service provider. The revenue is shared. Content aggregators and end carriage service providers must have an Australian presence, while content providers or creators can be based overseas.
According to the Budde Report on mobile premium services, in 2009 Optus/Virgin was the major carriage service provider for mobile premium services with an estimated 48 per cent market share. This was followed by Telstra (34 per cent) and then Hutchison and Vodafone with 9 per cent each.
The list of key aggregators operating in Australia has included mBlox, Sybase 365, Netsize Group, IDS Australia, Mobile Messenger and 5th Finger. Aggregators have relied on numerous content providers to maintain their place in the market. One of the better known content providers is Jamster (Jamba!) who released the ‘Crazy Frog’ ringtone.
Revenue
According to the same Budde Report, the size of the industry peaked in 2008 when the estimated annual revenue was $240 million. In 2010, the estimated revenue had declined to $220 million per annum.
The highest percentage of revenue has been for content downloads (55 per cent) followed by promotions and voting (20 per cent), information/alerts/news subscriptions (15 per cent) and chat services (10 per cent).
THE CHALLENGES
1. Consumer harm
Reported harm
Complainants began reporting issues with mobile premium services to the ACCC in 2004. While there were very few complaints at the time, the main impetus for these complaints was unexpectedly high phone bills that related in the main to alleged unsolicited premium subscription services.
These types of content services were new to the Australian market and consumers were quick to express their dismay and frustration.
Complaints began to escalate from 2005 with reported sums of unexpectedly high phone bills gradually becoming a feature of many of those complaints. Information from complainants at that time was not always very clear. However, billing details recorded for the period March to December 2009 show that around 122 complainants reported billing concerns totalling approximately $16 000, with around $14 000 for the period up to 1 July 2009. Individual sums ranged from $5 to $8500 for a service that had been undetected for two years.
As not all complainants detailed their monetary concerns this sum is only indicative of the total sums involved. It would be expected that the overall total of sums in dispute would be much higher.
The issue of unexpectedly high phone bills for mobile premium services formed part of a number of telecommunications billing issues that became known as ‘bill shock’.
Escalating complaints
From January 2005 to the end of April 2009 the ACCC received over 3500 complaints and inquiries in relation to mobile premium services. As can be seen below the overall trend was an increase in consumer contacts. In the 2007–08 financial year there were approximately 738 contacts, while from July 2008 to the end of April 2009 the figure increased to around 839 contacts.
Later figures showed that a further 551 contacts were recorded by the ACCC’s Infocentre for the period May to December 2009, bringing the approximate total number of contacts at 31 December 2009 to 4051.
Issues reported by complainants that were behind the unexpectedly high phone bills and related concerns were:
•	unsolicited text messages and content
•	consumers unaware that they had subscribed to a premium message service
•	a lack of disclosure, obscure fine print or failure to read terms and conditions
•	alleged scam activity
•	inability to have premium service subscriptions stopped
•	poor complaints handling.
Both the escalating complaints and the issues reported to the ACCC were consistent with those in reports from the Telecommunications Industry Ombudsman (TIO), an independent agency that operates the TIO Scheme. In September 2008, the TIO issued its report on the industry, Mobile Premium Services Complaint Drivers.
The TIO findings showed that complaints about the mobile premium services industry were increasing. In the 2007–08 financial year the TIO received 13 900 complaints. Most of these related to subscription services, complainants not being aware that they had signed up to such a service and difficulties in stopping the services. There were also complaints about how issues were dealt with by providers. Amounts in dispute ranged from $2.75 to $2325.
Consumer complaints to the ACCC
The following represent typical examples of matters reported to the ACCC’s Infocentre.
Consumer frustration is self evident.
Example one
I was on the internet when up came a pop up message saying I had won a mobile phone. Anyway I stupidly proceeded giving my address, mobile phone number etc. I am a bit naïve and an old pensioner on top of that. I ended up swallowing the bait on what I now know to be a ‘premium subscription’ scam. Before I could reply stop they sent me five text messages at a cost of $6.60 each within a minute!
Example two
Help, please! Someone is taking my money and I cannot find out who. I have been receiving SMS messages and I do not know who the sender is. I do not know how to stop it. It was only when I received my phone bill that I discovered that I was charged $6.60 for every SMS received, about $150 so far. I have NEVER subscribed to any service nor purchased anything online or by phone.
Example three
My daughter downloaded a ringtone onto her phone. Not only did she not receive it, but she was charged $5 several times a day on several occasions, despite sending them a request to unsubscribe. She was continually sent messages charged at $5 a time, a total of $75.
Example four
I recently received an SMS “Thankyou for subscribing 2 horoscope of the day $2 day max 7/week. reply STOP or email xxx@provider.com”. I did not subscribe to anything. All I got was an automated reply from the provider and no help!
Example five
Complainant’s daughter who is 13 unknowingly subscribed to a premium mobile service and racked up a $350 bill. The complainant contacted the provider and was told that she would still have to pay the bill.
Example six
My 88-year-old mother had a winning scratchie she found in a newspaper/magazine. She asked me to text the number to see what she had won. I did this only to be bombarded immediately with texts to my mobile costing me $5.00 at a time for receiving them. I did text stop at 5.32 pm that day but by then I had already received two of these unsolicited texts costing me $10.00. The text to stop cost 0.25c and the original text cost 0.25c so all up it cost me $10.50. How can they say you have WON SOMETHING, when it immediately costs you money? By the way, the prize was either seven mins or $7 worth of some game the details of which I didn’t get as I was frantic to stop the onslaught of texts before they overwhelmed me.
Example seven
Trader XX sent a text message to my pensioner mother’s mobile. Somehow Trader XX believed that she had managed to send a text back saying OK to a gaming download site at $100 a month. My mother does not believe she answered and she does not play games on her mobile.
2.	Lack of understanding about mobile premium services
Complaints and inquiries to the ACCC suggested that some of the issues arising from the industry resulted from consumers dealing with new technologies and business models. Not all complainants understood the nature of such services and were unclear as to how to deal with what they believed to be unsolicited costly services.
Some had adopted the tactic used for dealing with spam, namely to delete the messages. Others thought that if the messages were not opened the service would stop or not incur a charge. The reality was that any message received, opened or not still incurred the premium charge. Also, deleting the messages did not result in stopping the service.
The business model that was behind the delivery of such services also contributed to the general confusion. ACCC complainants indicated that they were unsure who could provide help. Advice from the carriage service providers’ complaints handling staff was often unhelpful and some complainants simply found themselves arguing their point with no success. Others were told to contact the content provider who was often based overseas and difficult to contact. The perception was at that time that the consumer had signed up to a service only to regret it once the cost became apparent and now was after a refund.
3.	Investigation challenges
Allegations of unsolicited premium rate subscription services were the main subject of complaints to the ACCC about this industry. Two main scenarios emerged as underpinning these complaints:
•	unsolicited services per se, i.e. they were clearly not requested and the consumer had never heard of the promotion
•	lack of informed consent resulting from misunderstood or difficult to see terms and conditions, i.e. poor advertising practices.
During 2006 and 2007, a number of investigations were initiated into allegations of unsolicited subscription services. These achieved ad hoc results with some advertising and consent issues addressed. However, while some industry participants showed a willingness to comply, these informal approaches did not make any real impact on overall industry compliance.
The main challenge that arose in investigating such complaints was that in many cases it was difficult to establish an ongoing pattern of conduct by particular identifiable traders where it was clear that service had not been initiated by the consumer. Many complaints related to isolated incidences.
There were also difficulties in identifying or locating problematic content providers who were often based overseas or in some cases were outright scammers. The dynamic nature of the industry also exacerbated these difficulties. In most circumstances consumers did not become aware of charges for mobile premium services until they received their mobile phone bills or their pre-paid credit ran out unexpectedly. Some complainants pointed out that some of these charges were not noted until quite a few months or even years later. By that time the less scrupulous traders would have disappeared or morphed into another unidentifiable service.
4.	Regulatory issues
In 2006, the Mobile Premium Services Industry Scheme (MPSI Scheme) was put into place following the Telecommunications Service Provider (Mobile Premium Services) Determination 2005 (no.1). Though the MPSI Scheme provided rules for industry to provide clear and transparent information about costs and terms, escalating complaints showed that it was ineffectual in addressing consumer concerns and harm. The MPSI Scheme was largely self-regulated and the provisions and requirements were not adhered to by all content providers, many of whom were based overseas.
MEETING THE CHALLENGES
Consistently high complaints and reported consumer losses required effective solutions. Interventions such as MPSI, and educative and ad hoc enforcement efforts had not been sufficient in overcoming the lack of compliance on the part of many industry participants and addressing consumer concerns.
For the ACCC, further consumer education was seen as the first step. This could assist consumers in being better informed about the nature of the services and provide advice on how to protect themselves or their family. Education also extended to industry participants as it was important for them to be aware of their obligations under the then Trade Practices Act 1974 (the Act) now the Competition and Consumer Act 2010.
A more targeted enforcement strategy was also seen as a serious option. This would alert traders to their obligations under the Act and contribute to better compliance in the industry.
As well as these proactive approaches, contribution to regulatory change was also seen as a crucial component of providing a long-term solution to the problem. This involved consulting with other key agencies and industry bodies, including the Australian Communications and Media Authority (ACMA), the TIO and Communications Alliance.
1.	Educating consumers and businesses
From late 2004, the ACCC’s website, consumer bulletins and media articles began to include information and warnings about the pitfalls of mobile premium services, in particular those that operated via the subscription model.
Training was provided to ACCC Infocentre call centre staff so that they could provide better advice to the ever-growing number of complainants.
In 2007, the ACCC joined forces with the ACMA in issuing a factsheet—Mobile Premium Services—information for consumers.
In July 2009, the ACCC’s Update featured articles on mobile premium services, including tips on how to avoid costly bills.
Businesses were also put on notice about poor advertising practices. The ACCC’s then Chairman, Mr Graeme Samuel, included warnings to the industry in his speeches to industry participants and in media releases. In the media release Telcos told: raise standards or risk ACCC action, mobile premium service providers were told:
•	The ACCC is drawing a line in the sand—we’re saying to the poor performers, and there are many of them, mend your ways.
These warnings were soon translated into successful court action against non-compliant traders.
Details on the ACCC’s key educational materials and related activities for mobile premium services are at Appendix A.
2.	Investigations and enforcement action
Learning from its previous investigations into unsolicited services, the ACCC decided early in 2008, to use a more targeted approach based on audits of advertising practices in the mobile premium services industry. These audits showed that many were aimed at the younger consumer. Complaints showed that younger consumers were particularly vulnerable to such advertising practices. The ACCC had received complaints about children as young as nine years old responding to advertisements in magazines.
The main aim of this targeted approach was to achieve speedier results in keeping with the dynamic nature of the industry. Two key areas were chosen—advertising in teen magazines and during family viewing time on TV.
Audits of the advertising practices showed that the main areas of concern in the promotion of the services were:
•	Cluttered or busy advertisements. Distracting images drew the consumer’s attention away from any information as to the cost or nature of the service.
•	Abuse of fine print disclaimers. The text in print, internet and television advertising tended to be in small fonts and often background colours were used that made it almost impossible to read the details.
•	Important details such as cost and nature of the service were placed away from the call to action. This was found to be particularly common in print and internet-based promotions.
•	Voiceovers that did little to clarify the cost and nature of the service.
Enforcement action
By mid 2008 a number of investigations had begun with the first set of proceedings instituted in August 2008 against TMG and Wixawin for their ‘text and win’ TV and internet promotions.
This was soon followed in February 2009 with undertakings given by the key teen magazine publishers, ACP (Dolly) and Pacific Magazines (Girlfriend). Both had agreed not to publish advertisements for mobile premium content services that did not clearly and prominently state the nature and cost of the services.
This outcome was a key result as magazines of this kind tended to include numerous advertisements for mobile premium services. Action against the publishers was seen as an efficient step to intervene in the right place in the supply chain to stop problematic traders replacing those that had been the subject of court or similar action in a never ending cycle.
The ACCC was not deterred from taking on overseas traders, and in February 2009 the ACCC commenced its next set of court action against two overseas content providers. Proceedings were instituted against AMV Holdings, based in the UK, and Teracomm, based in Bulgaria, for their respective print advertisements that also targeted teens.
Ongoing ACCC action resulted in successful court action against four other traders, Clarion Marketing Australia Pty Limited and Star Promotions Club Pty Limited for their respective scratch card promotions and the most recent Global One Mobile Entertainment Ltd (Global One) and 6G Pty Ltd (6G). Proceedings were instituted in the Federal Court against Global One and 6G in October 2010 for their television advertisements promoting a Justin Bieber ringtone, a mobile ‘Superquiz’ and the games Space Invaders and Doodle Jump.
Judgment was in the ACCC’s favour with the Court ordering penalties of $375 000 for all four advertisements. The decision was confirmed by the Full Federal Court on appeal.
Appendix B has complete summary of the ACCC’s court actions.
Investigation case study—Clarion Marketing Australia Pty Ltd
Between January and October 2009, Clarion distributed a total of 10 million scratch cards via letterbox drops and popular magazines and newspapers.
Anyone receiving the card was invited to scratch the latex panel to see if they had won a prize. Prizes ranged from a Mercedes-Benz car to electronic goods and a holiday voucher. All the cards were winning cards.
To claim the prize, a consumer had to text into a mobile premium number. In doing so they found themselves signed up to a premium rate mobile subscription service.
In June 2009, the ACCC instituted proceedings against Clarion and obtained interim injunctions to stop the conduct until the matter was heard by the court.
In December 2009, the court found that Clarion had misled consumers. Justice Nicholas said, ‘There was … no luck or chance involved in matching the three symbols. Everyone who played was bound to win a prize’.
Through the course of the advertising campaign no major prize was won.
The court ordered Clarion to send out a corrective SMS to customers telling them of the court’s decision, publish the details on their website and pay court costs. This was the ACCC’s first use of the SMS platform to deliver a corrective notice.
3.	Regulatory changes—MPS Code and related reviews
The mobile premium services industry is currently regulated under an ACMA registered co-regulated code of conduct—the Mobile Premium Services Code (MPS Code). The MPS Code was registered on 1 July 2009 and is administered by Communications Alliance which is the peak body for the Australian communications industry.
The MPS Code arose out of dissatisfaction with the MPSI Scheme. Escalating complaints, damning reports in the press and the TIO’s September 2008 report clearly showed that the industry had not been able to contain the ongoing consumer detriment.
The ACCC, through its consultation role in the registration process for co-regulated codes under the Telecommunications Act 1997 (Telco Act), contributed very strongly to the MPS code implementation and review process.
Its investigations into MPS promotions provided the ACCC with a good understanding of the issues, such as the need for informed consent and other possible solutions that would assist in mitigating consumer harm. In particular:
•	The ‘double opt-in’ process was a key provision that the ACCC pushed to have included into the new MPS Code. This process was seen to be integral to reducing the number of unsolicited services or services that had been initiated without informed consent.
•	The ACCC also advocated call barring which provides the option for consumers to block mobile premium services from their phones. Call barring forms part of a suite of protections resulting from Determinations that were introduced to complement the MPS Code—the ‘do not contract’ and ‘do not bill’ requirements.
ACCC successes in the courts have also served to highlight issues with regards to advertising practices in the industry. Of particular note, is the result in the matter ACCC v Global One Mobile Entertainment Limited [2011] FCA 393, where Bennett J drew attention to problematic advertising practices that rely on the use of the word ‘subscribe’
The use of the word “subscribe”, in my view, was totally inadequate to inform the adult viewer, let alone a viewer under the age of 18, that what was being offered was a subscription to a broader service. [para 20]
Reference was also made to the use of small text to convey relevant terms and conditions
The writing is on the screen for a sufficient time for a person who wished to read it to do so. However, it is in small text and is difficult to read. [para 18]
Such clarifications of the law will not only provide guidance to all those operating in the industry, but also opportunities to refine provisions during future reviews of the MPS Code.
MEASURING SUCCESS
Any successes achieved in addressing the issues associated with mobile premium services are as a result of not only the ACCC’s intervention but also the strong regulatory change and input from all regulatory, consumer and industry bodies involved in dealing with these issues.
Declining complaint numbers and
reported losses
A key indicator for the ACCC in measuring the success of its response to the issues in the industry is the decline in the reported losses and number of complaints/inquiries to the ACCC about the industry.
Where the reported sums in dispute from March to December 2009 from around 122 complainants totalled approximately $16 000, for the same period in 2010 the total was approximately $4751 from 69 complainants. Individual sums ranged from $0.95 to $524. These figures show a significant decline overall from the 2009 figures.
It should be noted again that these figures are only indicative and are based on complaints where the monetary sums have been provided. It is likely that the true amount would be higher overall.
While the monetary figures are only indicative, the decline in complaints and inquiries to the ACCC can clearly be seen below. In particular, there is a marked decline in the number of contacts leading up to and after 1 July 2009 when the MPS Code came into effect. Complaints dropped from around 800 in 2008 to around 200 in 2010. This is consistent with the decline in the number of reported monetary sums in dispute.
Current figures show that since January 2011 complaint numbers have dropped significantly to around 10 complaints per month. These relate in the main to services accessed via internet pop-ups or similar online promotions. The main issues reported have remained constant—alleged unsolicited subscription services, poor complaints handling and difficulties in stopping the services.
•	The ACCC is not the prime complaints handling body for telecommunication services. However, the TIO in its annual report for 2011 also reported a similar pattern of decline in complaint numbers.
Other factors
The uptake of smart phones and the related apps market cannot be discounted as also contributing strongly to the decline in complaint numbers and reported harm related to mobile premium services. According to ACMA’s report The emerging mobile telecommunications service market in Australia, “Australia has one of the highest levels of smartphone penetration in the world. ACMA research found that 37 per cent of mobile phone users had a smartphone”.
The Budde Report notes that in 2009 the market for mobile premium style services declined by 29 per cent as ‘users enjoyed the freedom of choosing their own content using the new smart phones’. The same report goes on to say that in one decade the premium service content providers developed approximately 100 different mobile premium services whereas at the time the report was written in March 2010 there were around 140 000 apps for the Apple iPhone.
The Apple App store was launched in July 2008 followed in October by the launch of the Android App store. According to Apple, more than 10 million apps were downloaded in three days. Further comments to the press suggested that this number had grown even further. Google’s Android and other apps platforms are also having a significant impact on the market.
Growth of the apps market since mid-2008 paralleled ACCC action and the regulatory changes in the mobile premium services market. While, the apps market was still maturing at that time it is likely that consumer shift towards this new style of content would have had some influence on the declining number of complaints and reports of harm regarding mobile premium services because fewer such services were being accessed.
FUTURE ISSUES
Ad hoc reviews of current television and print advertising have shown a significant decrease in the number of advertisements for mobile premium subscription services. However, there still appear to be a number of such services being offered via the internet, some of which are the subject of recent complaints to the ACCC. More recently some mobile premium services have been promoted via links in mobile apps.
While ‘innovative’ uses of technology may trigger a future spike in complaints, it is anticipated that provisions in the MPS Code, such as the double opt‑in and related additions such as call barring, content provider registration and the do not bill process should assist in mitigating extreme conduct and consumer harm.
It is also very likely that the results of the ACMA’s Reconnecting the Customer initiative and the Telecommunications Consumer Protections Code will complement the protections offered by the MPS Code.

A change in the market, as noted earlier, through the proliferation of smart phones and beyond is another factor that will see the type of mobile premium services that were the subject of complaints replaced by newer products. This should further reduce the number of complaints and reported harm in the mobile premium services industry.
CONCLUSION
As noted, the ACCC is not the only regulatory body that has contributed to addressing many of the problems in the mobile premium services industry. However, the ACCC has achieved quantifiable outcomes in the courts and provided ongoing advice to consumers through its Infocentre and educative materials. Its strong role in pushing for regulatory change through its consultative role in the MPS Code review process and working with other regulatory and industry bodies has also contributed to the significant changes and additions to the regulatory landscape.
Achieving these outcomes was not without challenges. The take-up of such services was initially thought to be a passing fad that would soon disappear. This was not the case. The industry became stronger with advertisements regularly screened during music and family television shows as well as being inserted into popular magazines. It seemed that there were many consumers who were very keen to vote via the relatively new SMS platform, enter competitions and add new ringtones and wallpapers to customise their mobile phones.
The ACCC has found that by using an integrated strategy that drew on its educative capabilities, its rigorous enforcement combined with its contribution to the all-important regulatory change, has reduced complaint numbers and apparent harm from sharp practices in the industry and delivered real benefits to consumers.
These services also presented a new style of business that operated via a personal electronic space that had not been the subject of any similar ACCC investigations. The lessons learnt during that process will now assist in dealing with investigations into even newer technologies.
While complaints have declined significantly, it may be too early to suggest that the issues with mobile premium services will disappear completely. To that end the ACCC still sees the refinement of the MPS Code as an ongoing process and will be contributing to any future reviews as required.

Appendix A
EDUCATING BUSINESS AND CONSUMERS
1. Key speeches
Consumer Congress 7 June 2011—Graeme Samuel, ACCC Chairman
‘I have been very vocal in my condemnation of bad MPS advertising—they often demonstrate some of the poorest and most exploitative practices, pitched directly at inexperienced consumers and resulting in real financial distress for them or their families’.
ATUG Sydney 12 March 2010—Graeme Samuel, ACCC Chairman
‘Let me briefly raise another aspect of telecommunications which has proven to be a bugbear with many consumers, and where there is also movement towards a sector wide response—mobile premium services’.
ATUG Sydney 13 March 2009—Graeme Samuel, ACCC Chairman
‘Advertisements that feature busy, distracting visuals and hard-to-read fine print raise concerns in any industry. However, they are far too common when it comes to advertising mobile premium services. Advertisements of this type seem to be designed to confuse consumers about what they are getting when they send in their text message. Ultimately, many are misled into signing up for a costly ongoing service’.
2. Selected online information and publications
ACCC website		
Current	Ring tones, competitions and other mobile ‘premium’ services—information sheet	
2006	Ringtone Mayhem—online information sheet	
2005	Free Ringtone? (is it really free)—ACCC website Hot Topic	
2004	Text me baby, yeah!—ACCC Consumer Express November 2004 (online publication)	
Publications		
July 2009	ACCC Update Issue 26
Specific articles:
Hidden costs of mobile downloads
Scratch and lose
16 000 complaints a month and rising
Publishers targeted for misleading advertising
Improved safeguards for phone uses—New MPS code including ACCC’s role in lobbying for double opt-in	
2007	Mobile Premium Services—information for consumers (online publication)—Joint ACMA and ACCC fact sheet	

3. Key Media releases
2/11/08	‘Text And Win’ mobile subscription quiz TV ads declared misleading—(TMG Asia Pacific Pty Ltd and The Mobile Generation I BV—Netherlands)
‘This action should also send out a clear message to other players in the industry. If you advertise a mobile premium service consumers need to be properly informed as to the cost and nature of your service.’—ACCC Chairman, Mr Graeme Samuel
http://www.accc.gov.au/content/index.phtml/itemId/844739/fromItemId/810627	
16/2/09	Misleading advertising of mobile premium services in youth magazines—ACCC action (AMV Holdings Limited—UK, Teracomm Limited—Bulgaria, ACP and Pacific Magazines)
‘Young, unsophisticated readers are costing themselves or their parents a lot of money by unwittingly signing up to these services. Advertisers must not rely on minute fine print to disclose important terms and conditions. The costs and nature of the services must be prominently and clearly identifiable within the advertisement, particularly when it is targeting young people.’—ACCC Chairman, Mr Graeme Samuel
http://www.accc.gov.au/content/index.phtml/itemId/861083/fromItemId/855279	
13/3/09	Telcos told: Raise standards or risk ACCC action
‘The ACCC is drawing a line in the sand—we’re saying to the poor performers, and there are many of them, mend your ways.’—ACCC Chairman, Mr Graeme Samuel
http://www.accc.gov.au/content/index.phtml/itemId/863994/fromItemId/621277?pageDefinitionItemId=16940	
12/6/09	ACCC takes action to stop misleading SMS advertisements (Clarion Marketing Australia Pty Ltd & AMV Holdings Limited)
‘Preying on unsuspecting consumers, especially youth, is simply unacceptable and will not be tolerated’.
‘The action against AMV demonstrates that no matter where a company is based, the ACCC will take action to protect Australian consumers.’—Acting ACCC Chairman, Mr Peter Kell
http://www.accc.gov.au/content/index.phtml/itemId/876669/fromItemId/855279	
21/8/09	ACCC protects youth from misleading mobile premium service promotions (Teracomm Limited)
‘It is simple, if you advertise in Australia then you must follow Australian laws. The ACCC will not be deterred from going after overseas based companies that are doing the wrong thing by Australian consumers.’—ACCC Chairman, Mr Graeme Samuel
http://www.accc.gov.au/content/index.phtml/itemId/889320/fromItemId/855279	
24/12/09	Court finds scratch card promotion misleading (Clarion Marketing Australia Pty Ltd).
‘In early 2009 the ACCC warned the industry to clean up its act or face the consequences. This is another example of successful court action taken by the ACCC in the area of misleading mobile premium services promotions.’—ACCC Chairman, Mr Graeme Samuel
http://www.accc.gov.au/content/index.phtml/itemId/907650/fromItemId/855279	
10/3/10	Star Promotions Club scratch card promotion declared misleading (Star Promotions Club Pty Limited)
‘Anyone scratching the cards found that they were a lucky winner, that is, until they sent in their text message to check what prize they had won,’ ACCC Chairman Graeme Samuel said today. ‘Most consumers found that they were simply signed up to a mobile premium subscription service costing $6.60 per week, rather than the winner of a car or a substantial cash prize.
‘Advertising that is used to lure consumers into costly services is unacceptable. Service providers need to make sure that all important terms and conditions are up front and easily understood.’
http://www.accc.gov.au/content/index.phtml/itemId/918086/fromItemId/927069	
17/6/11	Mobile premium service providers penalised $375 000 (Global One Mobile Entertainment Ltd and 6G Pty Ltd)
ACCC chairman Graeme Samuel said this matter is 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.’
http://www.accc.gov.au/content/index.phtml/itemId/993025	
18/9/12	Full Federal Court upholds $375 000 penalties against mobile premium service providers (Global One Mobile Entertainment Ltd and 6G Pty Ltd)
ACCC Chairman Rod Sims said ‘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.’
The media release also included a link to the case study Mobile Premium Services: meeting the challenges.
http://www.accc.gov.au/content/index.phtml/itemId/1079378	

Appendix B
Summary of ACCC court outcomes to date
October 2008	TMG Asia Pacific Pty Ltd and The Mobile Generation I BV (Netherlands) for TV ‘text and win’ promotions and internet pop-up (Wixawin). Outcomes were consent orders and s. 87B undertaking for the Wixawin matter.
Both TMG AP and TMG BV undertook to clearly communicate in advertisements or promotions for premium mobile content services, including SMS competitions, who is eligible to enter the competition; the nature of the services provided; who is promoting the services; and the relevant terms and conditions.	
February 2009	ACP and Pacific Magazines—for print advertisements in their teen magazines. Individual s. 87B undertakings were accepted from both publishers.
ACP and Pacific Magazines gave court enforceable undertakings that they would not publish advertisements unless they clearly and prominently state the nature, cost and any eligibility requirements of receiving the service.	
June 2009	AMV Holdings Limited (UK)—for print ads in teen magazines. Consent orders and s. 87B undertaking were obtained.
AMV Holdings undertook for the next four years to follow certain advertising practices, including communicating clearly the nature of content services being advertised or promoted, particularly subscription services; using sufficiently large font size and in close proximity to the number to be called; and clearly and prominently stating where ringtones are not recordings of the original songs.	
August 2009	Teracomm Limited (Bulgaria)—for print advertisements in teen magazines. Court action was taken which resulted in judgment in favour of the ACCC.
Justice Moore comments regarding the introductory message to the service:
Freemsg: get ur love compatibility scores in www.mob.vc love subscription. Help 1300734821. To stop txt stop to 193040. $9/wk+#3(sic) per try.
‘While reference was made to “subscription” and “per try” and a weekly amount was specified and the method of stopping the subscription was also identified, these signifiers of a subscription were, at best, only a somewhat cryptic and indirect statement of what the consumer had done, namely entered an agreement subscribing to a service for which the weekly amount would be paid until the agreement was terminated by a positive act of the consumer’. ACCC v Teracomm Ltd [2009] FCA 903 at [22]	
December 2009	Clarion Marketing Australia Pty Ltd—scratch card promotions. Court action resulted in interlocutory injunctions (in June 2009) and final judgment in favour of the ACCC.
Justice Nicholas comments regarding the promotional scratch cards:
‘…everyone who played the game was encouraged to believe that by good luck they had won a valuable prize which was at the very least worth collecting. In the excitement of believing that they were a winner of a valuable prize I think it unlikely that a person would have proceeded to read the scratch card in the careful and leisurely manner suggested by the Respondent, at least not before he or she had first sent the SMS consisting of the prize code’. ACCC v Clarion Marketing Australia Pty Ltd [2009] FCA 1441 at [64]	
March 2010	Star Promotions Club Pty Limited—scratch card promotions. Outcome was orders by consent.
Justice Rares comments regarding the promotional scratch cards:
‘First, the conduct complained of was misleading or deceptive, in contravention of s. 52 of the Act, because the cards represented that the consumer would be lucky if he or she scratched one of the three sets of cards and found matching symbols, when the true position was that every set of three cards, available to every consumer, contained a set of three matching symbols. No luck was involved’. ACCC v Star Promotions Club Pty Limited [2010] FCA 139 at [26]	
April 2011	Global One Mobile Entertainment Ltd and 6G Pty Ltd—for television advertising promoting mobile subscription services. Final orders were handed down on 15 June 2011.
The Court ordered penalties of $375 000 for the four television advertisements promoting mobile premium services; injunctions; costs and the implementation of a compliance program.	
September 2012	Global One Mobile Entertainment Ltd and 6G Pty Ltd (appeal)—for television advertising promoting mobile subscription services.
Previous decision was upheld by the Full Federal Court.	

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