Mobile service provider mBlox has been fined £40,000 by the
premium-rate regulator because the Crazy Frog ringtone promotions
were misleading. But mBlox says it may seek judicial review –
because it neither created nor promoted the content.
ICSTIS, the Independent Committee for the Supervision of
Standards of Telephone Information Services, also ordered mBlox
yesterday to pay refunds to 338 people who complained to the
regulator.
The Crazy Frog phenomenon hit Britain in May 2005. Adverts
featuring the animated amphibian, dressed in a leather motorcycle
cap and goggles, promoted a ringtone that appeared to cost £3. But
many purchasers became upset when they discovered they had
unwittingly signed-up for a subscription service costing £3 per
week.
The Crazy Frog ringtone spawned a single that reached number one
in the UK charts which helped to drive ringtone sales. The
marketing spend was enormous; the return is unknown. ICSTIS
received the revenue figures but kept them confidential. It only
noted that the figures clearly demonstrated that the "hugely
successful" service assumed the character of a "mass
phenomenon".
ICSTIS targeted mobile service provider mBlox in its
investigation. However, the ringtone and the adverts came from
another company, Jamba! – owned by internet giant VeriSign. MBlox
sought to distance itself from liability for the promotion,
attempting to shift the blame to Jamba! But ICSTIS rejected its
arguments.
The ICSTIS Hearing Panel found that the promotions required a
lot of interpretation, application and patience from consumers. It
observed that a great deal of thought had gone into producing the
ads – but little time appeared to have been spent on the terms and
conditions. These omitted significant information and were unclear
about what the service entailed.
“The Hearing Panel has made clear that consumers should not be
made to work to find out what any premium rate service involves or
costs,” explained ICSTIS Director George Kidd. “Although the Panel
found that there was no fraudulent or malicious intent behind the
service, the companies concerned showed a careless disregard and
unprofessional attitude to consumers in failing to be clear on the
exact nature of the service.”
ICSTIS commented that it had no remit to impose sanctions
against Jamba! and MBlox has a right to appeal. But MBlox issued a
statement yesterday that raises the possibility of "judicial review
of the interpretation of the ICSTIS code that has held mBlox
responsible for the action of a third party such as Jamba!"
The firm also asked ICSTIS to change its regulatory framework to
make the people who create and promote mobile content accountable
for the content transmitted to consumers and the marketing
practices they adopt.
