TV phone scandals claim another victim
OUT-LAW Radio, 08/05/2008
As ITV faces a £5.7m fine, we ask an industry rep why nobody
noticed the abuses while they happened
A text transcription follows.
This transcript is for anyone with a hearing impairment or who
for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew
Magee.
Hello and welcome to OUT-LAW Radio, the weekly podcast that
keeps you up to date on all the twists and turns in the world of
technology law.
Every week we bring you the latest news and in depth features
that help you to make sense of the ever changing laws that govern
technology today.
My name is Matthew Magee, and this week we ask the trade body
behind premium phone line operators why nobody noticed that
operators spent much of last year fleecing punters.
But first, the news:
Rowling wins privacy victory for son and OUT-LAW wins a
webby
JK Rowling's court victory against a paparazzi agency has
confirmed that the scope of privacy law is wide and will make it
easier for others to gain its protection, a privacy law expert has
said.
A Court of Appeal ruling in Rowling's favour has reinforced the
circumstances in which people are entitled to the protection of
Article 8 of the European Convention on Human Rights (ECHR), said
Rosemary Jay, Head of the Information Law Team at Pinsent Masons,
the law firm behind OUT-LAW.
"The Court of Appeal has confirmed that Article 8 is engaged
whenever people have a 'reasonable expectation of privacy' and that
can occur at quite an ordinary level, which is very helpful," she
said.
Rowling took the case with her husband on behalf of her son,
David Murray, who was part of a photograph of the family on the
street in 2004 that was published in 2005. At the time of the
photo, David was 19 months old.
The High Court had thrown the case out before trial, but the
Court of Appeal said that there was a case to answer and a full
trial should be heard.
OUT-LAW has won the internet's most prestigious award, a Webby.
It won in the category of best law website, becoming the first law
firm ever to win a Webby in the awards' 12 year history.
Hailed by The New York Times as 'the Oscars of the internet', the
Webbys receive worldwide media attention and are judged by a panel
which this year included Simpsons creator Matt Groening and movie
mogul Harvey Weinstein.
Websites and mobile services compete in 100 categories and other
winners this year include Yahoo!, Apple, the Financial Times, the
BBC and The New York Times. There were almost 10,000 entries from
more than 60 countries.
As well as being the first law firm winner, OUT-LAW was also the
first ever nominee for 'Best law website' from a non US
organisation.
That was this week's out-law news.
ITV has just been fined £5.7 million today for breaching media
regulator Ofcom's code over abuse of premium rate phone services,
so what would you call a year in which your industry was the cause
of millions of pounds worth of punitive fines, endless outraged
front pages, a restructuring of the way popular television works, a
BBC ban on competitions and a loss of the public's trust?
Catastrophic? Nightmarish? Apocalyptic? Sally Weatherall chooses
'interesting'. She is the chair of the association for interactive
media and entertainment, or AIME, the representative body for
providers of premium rate phone services.
This week's is Ofcom's highest ever fine, and goes on top of the
£7.8m that ITV has committed to viewer compensation and charity.
ITV is not alone, though. Last year phone in scandals dominated the
news and turned participation from a lucrative trend into a dirty
word.
We'll hear how Weatherall thinks regulation still needs to be
improved later, but first let's hear her assessment of what, by
anyone's standards, has been an annus horribilis.
Weatherall: It's been a very interesting
year and I think coming into the second half of this year, I think
it's going to be entirely constructive. I think there's a much
broader recognition of the impact of these interactive services and
their utility and their value to consumers; but also the
responsibilities that go along with that. I think what was greatly
underestimated and, frankly I don't think there was very much
transparency of it at all, was the regulation responsibility that
went alongside that in terms of operating these services. I do
think it was a straightforward as there being a complete lack of
transparency in terms of the broadcasters making the connection
that this was a premium rate service and was therefore regulated.
It's a new sector of the industry outside their traditional
Ofcom-licensed broadcast environment.
Premium rate phone lines are regulated by PhonepayPlus, which
used to be called ICSTIS. It only regulates the companies that
actually provide the services, not the broadcasters or the
producers of the TV programmes behind phone votes.
Weatherall puts the breaking of the rules down to broadcasters'
failure to understand the regulatory environment.
Weatherall: It is a micro payment to
express yourself, to have your vote or to submit your comments or
to influence the content of a programme. I think, you know, that at
one level it's a kind of self contained service. It's a different
thing to say that this is a sort of more traditional premium rate
service and therefore it precipitates the regulations and so on and
the transparency and the reach of those regulations to the actual
content providers themselves is that there isn't a sort of direct
link if you know what I mean.
The fines involved very large service provider companies dealing
with massive volumes of material. Some of the industry's big names
were involved. So was this a failing of the premium rate industry
at a pretty basic level?
Weatherall: No I don’t think it's fair to
say that that's the description of an entire industry in any shape
or form. You know clearly there was non compliance and that non
compliance has been fined and quite rightly so. In isolation they
were a limited number of companies who were involved in that
activity and to the extent that they were responsible then they've
been fined. And that's exactly what the regulation is there
for.
Magee: But these were not one or
two small rogue operators that - there may be not that many of them
but they were the biggest companies and they were the companies
processing vast numbers of transactions. I mean you think - you
can't really say that it was small rogue operators.
Weatherall: Well I can't comment as to
what, you know, went through their own minds and in terms of, you
know, the management decisions that they were made but to the
extent that they've acted in a non compliant way, the regulation
has been entirely effective. And you know the consumers have had
the redress that they need and the companies have been fined
accordingly.
Magee: When this was going on
before it came to light, why did nobody notice at the time? Why did
nobody take charge as it was happening because it was endemic?
Weatherall: Well I don't think it's fair
to say it was endemic but
Magee: You don't think every UK
terrestrial broadcaster being involved on multiples of shows, on
millions of transactions, is endemic?
Weatherall: Well we can argue about what
we mean by endemic. I mean it was - as I say I just don't think at
a very basic level that there was this sufficient transparency and
enforcement of the regulation. I mean it's a good question to ask
Ofcom.
Of course the scandals led to Ofcom completely changing the way
such competitions are regulated, telling broadcasters that they,
and not just the premium rate service provider companies, are
ultimately responsible for competitions.
Weatherall thinks this is a good idea, but the trouble is that
Ofcom doesn't regulate newspapers, which also run many premium rate
competitions. She thinks that PhonepayPlus, or PPP, should extend
its regulation directly to newspapers.
Weatherall: I don't understand why the
same approach hasn't been taken to those who market and manage
services in the print media and on the internet etc, etc. I think
it's slightly patronising in fact to say that it is only the
broadcasting environment that requires this level of direct
regulation. The regulation bites on the technology provider for the
infringements of the content providers and clearly the technology
provider has no control either managerially or editorially over the
content that is advertised in the press, magazines and on the
internet etc. And it's an issue of scale for PPP because clearly
there are a number of content providers and only a handful of
service providers; and so it's easier for them to regulate the
service providers. But it's simply not effective.
PhonepayPlus told us that it can take action against publishers
but only when they agree to be regulated by it. A spokesman said:
"It is a question of proportionality. Lots of broadcasters were
asking customers for tens of millions of pounds, that was evidence
that a regulatory approach was necessary. There is no such smoking
gun with publishers. Is it endemic or systemic, in need of
strategic approach? The answer is no, not to anything like the same
degree as in broadcasting in the last year."
So after more than a year of turbulence for premium rate phone
operators the regulatory environment is settling down, but the
service providers may yet push for the net to be cast wider in
the
That's all we have time for this week, thanks for
listening.
Why not get in touch with OUT-LAW Radio? Do you know of a
technology law story? We'd love to hear from you on Radio@out-law.com.
Make sure you tune in next week; for now, goodbye.
OUT-LAW Radio was produced and presented by Matthew Magee for
international law firm Pinsent Masons.
