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.
