EU cracks down on mobile content scams
The European Union has concluded an 18-month long investigation into 301 websites selling ringtones and wallpapers, resulting in hefty fines and the closure of at least 54 companies.
Italian online companies fared the worst, with Italian authorities imposing around €2 million in fines on nine companies that were in breach of the law.
Some big names were in the mix, including Vodafone, Telecom Italia, Wind, Hutchison 3G and Fox Mobile. The Italian Antitrust Authority said that these companies were fined since the sites were not providing clear information – for example about the number of ringtones available for the price mentioned.
EU Consumer Commissioner Meglena Kuneva said “this EU-wide investigation was a direct response to hundreds of complaints coming in from parents and consumers from many different EU countries.
“Young people should not have to fall victim to scams like misleading advertising that lure them into ringtone subscriptions they thought were free. And parents should not find nasty surprises in their phone bill, when their children by accident have signed up to more than they have bargained for.”
The EU was investigating issues including cost and disclosure of costs and subscription charges on the website.
Issues were resolved with 210 of the websites across 27 EU member states. Another 54 websites have since gone out of business and the EU is still working on 91 remaining cases which should attract penalties with other actions in 2010.
The three main problems found were: unclear, missing or incomplete pricing (41%); failure to provide complete trader information(75%); and misleading advertising, in particular, advertising ringtones as "free" (35%).
Kuneva said the EU wide investigations results showed that cross-border co-operation, “can make a huge difference in cleaning up a market for consumers. This kind of joint enforcement action is where EU consumer policy will focus a lot of efforts in the future."
More than 495 million Europeans own mobile phones, and ringtones alone were estimated to make up 29% of the mobile content market in Europe. The value of European ring-tone sales in 2007 was estimated at €691 million.