Crazy Frog service provider mBlox has been hit with an unwanted Christmas present in the shape of a 40,000 fine and formal reprimand by telecoms regulator ICSTIS. mBlox has also been ordered to pay refunds to all those who complained to the regulator. The adjudication follows a lengthy investigation and subsequent Oral hearing with mBlox, Jamba, and their legal representatives.
Although Jamba itself was not fined, the fine will be passed on to Jamba by mBlox.
This is a contractual arrangement we have with all our clients, and all our clients understand that mBlox Marketing Communications Manager Ariela Freed told Mobile Marketing.
In a 28-page ruling, ICSTIS found that the promotions for the service had been misleading, and not clear enough in terms of the costs involved. While the Hearing Panel found that a great deal of thought had gone into producing the advertisements for the service, little time had been spent on the terms and conditions. These omitted significant information, and were unclear about what the service entailed. As a result, the Hearing Panel found that the promotions required a lot of interpretation, application and patience from consumers.
ICSTIS received a total of 338 complaints about the service, many from consumers who were unaware of the ongoing subscription nature of the service. mBlox now has 20 days in which to appeal against the decision to the Independent Appeals Body.
In a statement, mBlox said it accepted ICSTISs adjudication on the appropriateness of the Crazy Frog promotion, but that it is considering requesting a judicial review of the interpretation of the ICSTIS code that has held it responsible for the action of a third party such as Jamba.
mBlox went on to say that it has made representations to ICSTIS that in future the regulatory framework should make the people who create and promote mobile content, the content (information) providers, accountable for the content transmitted to consumers and the marketing practices they adopt.
Given mBloxs specialised role in the mobile business value chain, mBlox believes that ICSTIS should be empowered to regulate the content providers directly the statement said.
mBlox also pointed to the role it has played in helping to clarify and implement the regulation of misleading advertising through its role in industry associations such as the Mobile Entertainment Forum (MEF). MBlox executive chairman Andrew Bud is Co-Vice Chair of the MEF.
Finally, mBlox said it will continue to play a full part within the regulatory framework to support ICSTIS and ensure, as far as possible, that the regulations are not breached by any content provider that supplies services to the public.