Check-up in the Danish Telecom Industry: Many Content Service Providers do not know Relevant Legislation

11. September 2009

Following a TV programme’s revelation of insufficient compliance with the rules on value-added content services, the Telecommunication Industries Association in Denmark (TI) spot-checked a number of providers in the Danish market earlier this year.

The check-up concluded that approximately half the service providers did not know or did not comply with the rules. TIs intervention caused the service providers to correct the irregularities found.

TI envisages at least 200 random checks spread over the year on an annual basis and wishes to respond quickly to complaints regarding services that do not meet the required legislation. Complaint handling procedures that facilitate swift action have been established.

The scope of the check-up

The market for value-added content services has an estimated turnover in Denmark of DKK 300 million (€ 40 million) annually. A number of content services were spot-checked, including:

  • News subscription
  • Pictures/logos
  • Jokes
  • Information services
  • Competitions
  • Mobile phone games
  • Ringing tones
  • Chat

The content services had been advertised in a number of news media, including:

  • Internet
  • Papers
  • Weekly magazines
  • Monthly magazines
  • Television and teletext

Results

The irregularities found covered a wide span. The check-up showed isolated instances of:

  • Unclear pricing
  • Insufficient information about the provider
  • Insufficient compliance with the margin of expenditure concerning competitions
  • Lack of delivery

The check-up also revealed more aggravating problems such as:

  • Insufficient compliance with the information duty set out in the rules of right of cancellation
  • Time of charge/payment

As for the rules on the right of cancellation, some of the providers granted their consumers this right. However, they did not all comply with the information duty which follows from the Danish Consumer Agreement Act. The requirement that the consumer must have consented to waive the right of cancellation on delivery was not met by all either.

As for the time of payment, TI observed that some of the providers charged the consumer early on in the order. This particularly constituted a problem in those cases where the consumer was charged prior to his or her consent to waive the right of cancellation on delivery.

Conclusion

While TI emphasised that none of the irregularities would leave the consumers with substantial losses due to an unlawful or incorrect presentation or design of the services, the Danish Consumer Ombudsman (DCO) stresses the need for continuous check-ups. The DCO acknowledges TI’s supervision and enforcement efforts; however, he also states that it can be difficult to assess whether and what violations or irregularities will cost the individual consumer. Moreover, he points to the fact that section 8 of the Danish Marketing Practices Act on children and young people should lead to further precautions to be taken when devising and marketing content services in the future.

(Other sources: Notification letter from the Telecommunication Industries Association in Denmark) 

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