Wireless Application Service Provider Associationwaspa.org.za/code/download/6868.pdf · Complaint...

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ADJUDICATOR’S REPORT

WASPA Member (SP): Opera Telecom

Information Provider (IP): Oxygen Marketing

Service Type: Subscription & Promotional Competition

Source of Complaints: WASPA Monitor

Complaint Number: 6868

Code of Conduct version: 7.0 and 7.4

Background to the Complaint A complaint was lodged by the WASPA Media Monitor on 23 June 2009 regarding certain promotional competitions and subscription services offered by the IP that made use of the wireless application services of the SP. The promotions were marketed through the distribution of scratch cards which were inserted into newspapers and magazines. The Monitor in fact complained in respect of three similar services. As all of the complaints raised by the Monitor were regarded as serious in nature by the WASPA Secretariat and as the issues raised in the complaints were substantially similar, all three complaints were dealt with simultaneously by an Emergency Panel of Adjudicators. Two of these complaints involved Opera Telecom and its client, Clarion Marketing (the IP in this complaint) and the third involved Opera Telecom and another of its clients, Star Promotions. The complaint that involved the subscription service being marketed by Oxygen Marketing under the Star Promotions Club brand (“the services”) is now dealt with in this adjudication report. The WASPA Monitor lodged complaints regarding the services based on version 7.4 of the WASPA Code of Conduct, which was published on 2009-06-17. In its initial response to the complaints, the SP noted that the promotional scratch cards were printed prior to the publication of version 7.4 of the Code, and argued that clauses amended in version 7.4, should not be applied retroactively, specifically clause 11.1.2. The Emergency Panel reviewed the timeline of this matter and agreed that in the interests of fairness, consideration of these complaints should be made in terms of version 7.0 of the Code, which came into effect on 2009-03-25, well before the printing and distribution of any of the relevant promotional materials. During this adjudication, I have considered both version 7.0, which was in force at the time the scratch cards were printed, and version 7.4 which was in force at the time the scratch cards were in circulation. In light of the approach adopted by the Emergency Panel and the responses of the SP and IP, I have considered it fair to consider whether any defences to the complaints would be available to SP under either version 7.0 or 7.4. of the Code.

Wireless Application Service Provider Association

Report of the Adjudicator Complaint #6858 and#6879

of 10 10 September 2009

After reviewing the available information for this complaint, the Emergency Panel concluded that there was prima facie evidence of a breach of clause 11.1.1 of the WASPA Code, in that the promotional material fell short of the requirement to "prominently and explicitly" identify the service as a subscription service. The panel also determined that there was prima facie evidence of a breach of clause 11.1.2 (as it appears in version 7.0 of the Code). The panel took the view that consumers would be unlikely to be making a request with the specific intention of subscribing to a service, as clause 11.1.2 requires, but would most likely be intending merely to claim one of the prizes on offer and as advertised on the cards. The panel also took the view that the breaches of 11.1.1 and 11.1.2 are of such a nature as to imply prima facie breaches of clauses 4.1.1 and 4.1.2 of the Code. Specifically the pricing information was not "clearly and accurately conveyed" as required by 4.1.1 and was likely to mislead due to ambiguity in breach of clause 4.1.2. In addition the panel also identified prima facie breaches of chapter 8 of the WASPA Advertising Rules and section 9.1 of the WASPA Code of Conduct. The Emergency Panel directed in their notice of 3 July 2009 that none of the promotional material that is the subject of complaints 6858, 6868 and 6879 be distributed to the public after the date of the notice being issued; that the SP take active steps to retrieve all copies of the above-mentioned promotional material from any distribution intermediaries to which it might have already been sent, and to prevent further promotional material from entering the public domain; that the SP suspend the mechanism of entering the competitions and the mechanism of subscribing to the services advertised in the relevant promotional materials with immediate effect, pending the formal review of this complaint; that the SP be barred from initiating any new subscriptions in response to these promotions, pending the formal review of this complaint; that the SP be prohibited from levying any further charges against customers who had already been added to subscription services as a result of responding to these promotions, pending the formal review of this complaint; and that an SMS notice be issued to all competition entrants (at the service provider’s cost) informing entrants that the competition had been ordered suspended by WASPA and offering customers a chance to request a refund or keep their entry in the competition pending the outcome of the formal complaints procedure. In the present matter, the Monitor complained as follows: The attached leaflet inserted into a newspaper, is making use of a competition in order to sell a subscription service. If I have won by getting 3 stars, then surely I should not need to pay R14/2 days to find out what I have won. This Promotion is running on the same principle as quizzes and competitions that we have seen on the internet – it’s simply making use of newspapers as a medium. A copy of the complaint containing the front and back of the relevant scratch card is annexed as Annexure A to this report.

Response of SP




In response to this complaint as well as the additional prima facie breaches of the Code identified by the Emergency Panel, the SP submitted various emails and written responses answering the complaints in some detail. The IP also submitted a written response. I have taken all of these emails and documents into consideration in this adjudication and in reaching my decision however, for purposes of compiling this report, I have included only the IP’s formal response of 15 July 2009 as an annexure hereto (i.e. Annexure B).

Decision Having taken all the information produced into account, the decisions I have reached are now set forth below. In reaching these decisions I have considered not only the arguments made by the IP and SP but also other information placed before me which has been admitted by either the SP or the IP or which was submitted by the Monitor and not disputed by either the SP or IP in response to the complaint or Emergency Notice. Subscription mechanism The transaction method by which a consumer is subscribed to the services bundles both the request to join a subscription service with an entry into a competition. That being the case, the service would clearly be in breach of section 11.1.2 of version 7.4 of the WASPA Code of Conduct which states as follows:

11.1.2. Any request from a customer to join a subscription service must be an independent transaction, with the specific intention of subscribing to a service. A request from a subscriber to join a subscription service may not be a request for a specific content item and may not be an entry into a competition or quiz. For the reasons described above, and given the date of printing of the scratch cards and the approach that the parties and the Emergency Panel adopted in this matter, I have considered whether the subscription transaction method also breached section 11.1.2 of version 7.0 of the Code which stated as follows: 11.1.2. Any request from a customer to join a subscription service must be an independent transaction, with the specific intention of subscribing to a service. A request from a subscriber to join a subscription service may not be a request for a specific content item. The first question I have considered is whether the inclusion of the words “… and may not be an entry into a competition or quiz” into section 11.1.2 of version 7.4 suggests that prior to this amendment a subscription request could in fact be bundled with a request to claim a prize. To my mind, it is possible that the amendment introduced by version 7.4 was designed to clarify the extent of the general prohibition rather than to actually introduce a new prohibition. In any event, there is no need to speculate on the purpose of the amendment introduced by version 7.4 as the first sentence of section 11.1.2 in version 7.0 contains a general prohibition which can be adequately interpreted without recourse to a subsequent version of the Code and the inclusion of an additional sentence in version 7.4 cannot sustain an argument that the general prohibition in version 7.0 ought to be interpreted any less generally than it was drafted.




The IP argued, inter alia, that “a reasonable subscriber will in all probability conclude an independent transaction with Opera Interactive to join the Star Promotions Club Subscription Services, while at the same time considering the award of the benefit. Furthermore, while the single content, which is the benefit received upon membership, is indeed part of the reason for joining the Star Promotions Club Subscription Services, it cannot be claimed that it would be the sole reason, particularly because the user is advised at every possible opportunity that the primary content is a bundle of subscription services.” Although the IP argued that consumers would have been aware that they were being subscribed to a service and that the services did not fall foul of the Code’s requirements that a consumer must transact “with the specific intention of subscribing to a service”, even if this argument were upheld, it would not necessarily follow that the service complied fully with section 11.1.2 of version 7.0 as the intent of the consumer is only one of the compliance tests laid down by that section. The remaining consideration is whether the subscription request was an “independent transaction” and the key word to be interpreted in that regard is the word “independent”. The remaining test is not whether the promotion amounted to a “competition” or not, but whether the subscription request transaction was an independent transaction or not. The word “independent” has a clear and unambiguous meaning as the opposite of the word “dependent”, which in turn means to be reliant upon something else. It follows that if a request to join a subscription service is dependent on anything else, it would not be an “independent” request. In the present matter, a person who sends a subscription request message must also simultaneously initiating the process of claiming a prize. In that sense the subscription request is not an independent transaction as it is in fact dependent on the consumer initiating the process by which prizes are claimed. The subscription request mechanism for the services bundles a prize claim request with a subscription request and therefore breaches section 11.1.2 of version 7.0 of the Code in that the subscription request transaction is not an independent transaction but is wholly dependant on a consumer submitting a request or claim for a prize. Below the line marketing The definitions to the WASPA Advertising Rules define “below-the-line-advertising” to include but not be limited to any marketing material that includes promotional flyers/leaflets, cd’s, flash drives, promotional stickers, scratch cards, business-card sized leaflets, small z-cards, promotional materials and products, including promotional materials printed on/displayed on any fast moving consumer goods. Section 8 of the WASPA Advertising Rules deal with below-the-line-marketing, including the use of scratch cards. The initial complaint submitted by the Monitor did not address non-compliance with the Advertising Rules. I have noted however that the SP was advised by the Secretariat that the Emergency Panel of Adjudicators had ruled that there was prima facie evidence in this complaint of a breach of section 8 of the Advertising Rules. The full text of section 8 of the Advertising Rules is set out below: 8. BELOW THE LINE MARKETING AND PROMOTIONAL MATERIA L 8.1 SCOPE




Applies to all Below-The-Line marketing material visible to the general public where Access Channels are displayed. Some examples include, but are not limited to:

• Promotional Flyers/Leaflets • CD’s • Flash Drives • Promotional Stickers • Scratch cards • Business-card sized leaflets • Small Z-cards • Promotional materials and products, including promotional materials printed on/displayed on • any FMCG products. e.g. executive gifts, cool drink tins, beer cans, bottle tops, wrappers, • boxes etc

(NOTE: this is not an inclusive list. Any Below-The-Line promotional material is covered) 8.2 DISPLAY RULES FOR COST & T&C INFORMATION 8.2.1 COST OF ACCESS & T&C DISPLAY RULES 8.2.2 Formatting Of Cost Text The size of the text showing the cost of access must be in 11 point font size This is 11 point Arial Font The access cost text must be in a non-serif font, preferably ‘Arial’ font. All access cost information must be placed horizontally 8.2.2.1 Formatting of the T&C Text The size of the text showing the T&C must be in 9 point font size This is 9 point Arial Font The T&C cost text must be in a non-serif font, preferably ‘Arial’ font T&C information must be placed horizontally 8.2.2.2 Position Of The Text Showing Access Cost an d T&C For each unique access number, the full and final cost of the access must be displayed immediately below, or above, or adjacent to the unique access number in a non-serif font. This T&C text must be placed close as possible to the unique access number. If multiple offers are made on the same advertisement and the cost and T&C differ with each offering, each offering must show the cost & T&C separately and clearly. If the access number has the ability to be torn off or detached from the promotional text and used independently, pricing information must also be displayed on both the remaining and detachable portions. Section 13.3.8 of the Code states that an adjudicator “may request that a member respond to any additional breaches of the Code of Conduct discovered during the investigation of a complaint, but which were not specified in the original complaint”. There is no obligation on an adjudicator to request such a response and the section affords the adjudicator a discretion in this regard. In the present matter, the SP was expressly advised by the Emergency Panel that section 8 of the Advertising Rules (which deals with scratch card promotions) may have been breached. In any event, certain breaches of the Advertising Rules in this matter are capable of being determined with recourse to the scratch cards themselves. In the present matter, I have therefore exercised my discretion not to lengthen the adjudication process unduly by inviting the SP or IP to address me further on these issues or any other section of the Code that addresses similar issues to those covered by section 8 of the Advertising Rules and have proceeded to consider additional breaches of the Advertising Rules and Code ex facie the scratch card submitted by the Monitor, the contents of which were admitted by the SP and IP. In the present matter and circumstances, I do not consider the SP or IP to have been unfairly prejudiced by the exercise of my discretion in this manner.




Having examined the scratch cards submitted, it is clear that the cost of the service was not displayed in Arial size 11 font nor was the cost of the service displayed immediately below, or above, or adjacent to the display of the access number. Accordingly the promotional material breached section 8.2.2 and 8.2.2.2 of the Advertising Rules. Furthermore, the cost of the service did not appear with all instances of the premium number display as required by section 6.2.5 of the Code. Deceptive advertising Section 6.2.5. of the Code requires that pricing for premium rated services must be easily and clearly visible in all advertisements. In the present matter, the pricing was not easily and clearly visible and was contained in the fine print only. Furthermore, section 4.1.2. of the Code requires that members must not knowingly disseminate information that is false or deceptive, or that is likely to mislead by inaccuracy, ambiguity, exaggeration or omission. Having studied the advertisements in question, I am of the opinion even if some consumers might have appreciated that they were signing up for a content subscription service that would be charged for at the rate of R14 per two days, I find it likely that other consumers may have been misled and do not think it reasonably likely that this would not have been known and fully appreciated by the IP. On the contrary, any reasonable IP would surely have appreciated the likelihood of some consumers being mislead by the manner in which the service was being promoted. However, there are no grounds for holding that the SP knowingly disseminated information that was likely to mislead and I do not find the SP to have breached section 4.1.2 of the Code. I have noted that the SP actively facilitated communications between WASPA, the IP and itself regarding the withdrawal of the advertisements once the complaints had been brought to the SP’s attention. However, I have also noted that the same SP is the subject of complaint 6858 and 6879 which run on an identical basis to the services complained of in this matter. Someone devised and designed the schemes by which all of the 3 services were promoted and offered and the common link between complaints 6858, 6879 and 6868 is the SP, not the IP. The IP argued further that a consumer would not be confused and that the promotion was never intended to be a competition but rather a reward based subscription service. However, if it was merely intended to promote a reward to consumers for subscribing, then there would be an expectation in the mind of an ordinary consumer that any new subscriber should qualify for one of the awards simply as a benefit of subscribing. However, in the present matter, only a consumer revealing a lucky match of 3 symbols on the scratch card qualifies for the award, so it is not simply the act of subscribing that qualifies a consumer for an award, but the lucky act of matching 3 symbols on the scratch card. This then definitely conveys the style of a competition or lucky draw rather than merely a straightforward reward for joining a subscription service. It does not matter if every scratch card contained a match, what is important is whether the consumer would be deceived into thinking they had qualified for a prize as a result of luck. Use of the word “award” rather than “prize” does not detract significantly from this impression and use of other words such as “congratulations” further re-inforces the impression that the consumer has won a prize in a competition. There is no description on the scratch cards of the nature of the subscription service or the type of content available to subscribers. Although there are fine print references to a subscription service, the overwhelming and dominant impression in the mind of any consumer coming across the scratch card




would be that it is a competition not an invitation to subscribe to a mobile content subscription service. Summary In summary, I find that sections 6.2.5 and 11.1.2 of the Code and sections 8.2.2 and 8.2.2.2 of the Advertising Rules have clearly been breached.

Sanction In considering the sanctions to be applied in this matter, I have had reference to a number of complaints that have been upheld against the SP previously, including the complaints discussed below. Although the IP stated in its response that “Opera Interactive and Oxygen Marketing have not previously been found guilty of any contravention of the provisions of the WASPA Code of Conduct” this is only true of the SP and IP as a combination service and is not true of the SP as a member of WASPA. In complaints numbers 4112, 4148 and 4149 the SP admitted that its client had omitted to display the relevant costs, terms and conditions as well as a closing date associated with various competitions advertised. In conceding that the Code had been breached, the SP stated as follows: “Going forward, Opera Interactive, together with the information provider endeavor to implement multiple checks on all print campaigns prior to publication. Included in our processes Opera will circulate regular reminders of the WASPA code of conduct to all clients”. In this matter the SP was given a fine of R10 000 suspended for 6 months. In complaint 4190 a complaint was upheld against the SP relating to a competition promoted in a magazine that did not include the cost of entering the competition or the closing date as required by clause 9.1.4 of the WASPA Code. In that matter the SP was fined the sum of R5 000.00 which was suspended for 3 (three) months. The SP was further encouraged to ensure that the IP and its clients are made aware of the requirements of the Code for future competitions. In complaint 4712 a complaint was upheld against the SP for failure to properly advertise the costs of a competition. In this complaint the Adjudicator cautioned that the SP is ultimately responsible for the acts and omissions of its service providers and that it should enter into contracts with those parties that protect it in the case where those parties’ acts and omissions cause it to suffer loss. In this matter the SP was fined an amount of R10 000 and directed to refund all entry fees to subscribers. In complaint 4782 a complaint was upheld against the SP for failure to properly advertise the costs of a competition. The SP was ordered to pay a fine of R10,000 of which R5,000 was suspended for a period of 6 months and the SP was directed to refund entry fees to subscribers requesting a refund. In complaint 4783 a complaint was upheld against the SP for failing to properly display pricing in a competition. In this matter the SP stated, inter alia, as follows: “Opera is not responsible directly for creating promotional material for third party campaigns; it is not practical for our media clients with tight print deadlines to submit page proofs to us for approval.” In this matter the SP was fined R15,000 of which R5,000 was suspended for a period of 6 months. The SP was also directed to refund entry fees to subscribers requesting a refund.




In light of the above complaints and the facts of the present matter, I am left to conclude that the SP continues to take inadequate steps to ensure that its clients are made aware of the provisions of the Code. This has the potential to cause substantial harm to both consumers and the Wireless Application Services industry as a whole. In light of the previous complaints upheld against the SP, the severity of the breaches in the present matter and the intended scale of the distribution of the scratch cards, I do not regard a lenient sanction as being justified in the present matter and impose the following sanctions: 1. The SP is directed to immediately:

1.1 suspend all further billing for the services; and

1.2 pending full compliance by the SP with the sanctions contained in paragraph 2 below:

(a) withhold payment of all amounts due by it to the IP as

contemplated by the provisions of section 13.4.1(i) of the Code;

(b) preserve and retain all revenue paid to it by any cellular network operator in respect of the services and to refrain from dissipating such revenue in any way;

(c) send an SMS message to all subscribers to the affected services

advising them as follows:

“The [name of service] has been suspended due 2 breach of WASPA Code of Conduct. Further communications will follow. For help contact [telephone number of SP]”; and

(d) suspend all billing for the services. 2. The SP is further directed:

2.1 to furnish WASPA with monthly statements of account (“the

statements”) detailing all revenue either already received by the SP or that is to be paid over to the SP by any cellular network operator in respect of the services from their commencement date until their termination;

2.2 to deliver a written consent to WASPA within 7 days of the delivery of

this adjudication report irrevocably authorizing WASPA to verify and audit the accuracy of the statements with the relevant network operators concerned and indemnifying WASPA against any and all claims for loss, costs and expenses that may be made against it by the IP, a network operator or any other person in this regard;

2.3 to send an SMS message to all subscribers to the affected services

advising them that the subscription service has been terminated due to breach of WASPA Code of Conduct and advising subscribers of their




right to claim a refund of all content subscription fees paid by contacting the SP’s help desk by 5pm on a date falling 30 days after the sending of such message or the first business day thereafter if that date falls on a weekend or public holiday;

2.4 following delivery of the SMS message provided for in paragraph 2.3, to

terminate the content subscription service and all billing for the service; 2.5 as contemplated by the provisions of section 13.4.3(g) of the Code, to

issue a blanket refund to all subscribers claiming a refund within the period mentioned in paragraph 2.3 above within 30 days of the expiry of such period provided that any amounts to be refunded shall be paid:

2.5.1 firstly from any IP revenue share held by the SP in terms of

paragraphs 1.2(a) and (b); 2.5.2 on exhaustion of the IP revenue share, from the SP revenue

share; and 2.5.3 on exhaustion of the SP revenue share, from additional funds to

be collected by the SP from the IP;

failing which the WASPA Secretariat shall direct all members to suspend all services to the IP and the amount to be refunded to any subscriber shall be pro-rated such that the amount shall bear the same proportion to the subscriber’s refund entitlement as total available funds bear to total refund entitlements;

2.6 within 30 days of the expiry of the 30 day refund period provided for in

paragraph 2.5 above, to

2.6.1 pay over or forfeit to WASPA an amount equal to:

(a) R100 000; or

(b) 100% of the SP revenue share generated by the service less VAT and less the total amount of blanket refunds paid out from the SP revenue share;

whichever amount is the greater failing which the SP’s membership of WASPA shall be suspended until such time as the greater amount has been paid; and

2.6.2 pay over to WASPA a fine of:

(a) R200 000 to be collected from the IP; or

(b) 100% of the remaining IP revenue share generated by the

service that is held or received by the SP, less:

(i) VAT (if applicable); (ii) the total amount of any blanket refunds paid out

from the IP revenue share; and




(iii) the actual cost price of any prizes purchased by the

IP and which are to be awarded to consumers as prizes in the competition;

whichever amount is the greater failing which the WASPA Secretariat shall direct all members to suspend the provision of all services to the IP and to refrain from the commencement of any new services to the IP until such time as the greater amount has been paid in full.

3. The SP is directed to deliver a report to the WASPA Secretariat by 30 December 2009 detailing the award of all prizes in the competition by the IP and the date on which each prize was received by or delivered to the winner thereof.

4. In terms of section 13.4.2 of the Code, the sanctions contained in paragraphs 1

and 3 above may not be suspended pending any appeal that may be instituted in this matter but shall be effective immediately on the publication of this report.

Service Provider: Opera Telecom - 31979

Media: Cape times insert – 12 June 2009-06-23

Date: 23 June 2009

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Problem:

The attached leaflet inserted into a newspaper, is making use of a competition in order to sell a subscription service.

If I have won by getting 3 stars, then surely I should not need to pay R14/2 days to find out what I have won.

This Promotion is running on the same principle as quizzes and competitions that we have seen on the internet – it’s simply making use of newspapers as a medium.

Code Breach:

11.1.2. Any request from a customer to join a subscription service must be an independent transaction, with the specific intention of subscribing to a service. A request from a subscriber to join a subscription service may not be a request for a specific content item and may not be an entry into a competition or quiz.

Requirements:

The inserts have already been distributed in the marketplace. It is requested that further insertions do not place. The SP is requested to supply their intentions with this campaign.

Annexure A

Annexure A

1.

2. Dear Sirs,

3.

4. I Introduction

5.

6. On 3 July 2009 the Wireless Application Service Providers’ Association

(“WASPA”) Secretariat invoked its emergency procedure against Opera

Interactive, in respect of Complaint 6868 (“the complaint”) which was lodged by

the WASPA Monitor (“the complainant”). The complaint relates to a promotional

competition linked to subscription services. The promotional material offers a

new car, R60 000 in cash and a Hawaiian holiday, amongst other prizes, under the

banner of “Star Promotions Club”. However, in order to participate, the customer

is required to first join a subscription service. The promotional competition takes

the form of a scratch card published by Opera Interactive in various newspapers

and magazines. A significant number of additional scratch cards are still

scheduled for future release to the public.

7.

8. In line with the emergency procedure set out in section 13.7 of the WASPA Code of

Conduct, an emergency panel constituting three panellists was convened by

WASPA to review the complaint (“the emergency panel”).

9.

10. II Decision reached by the emergency panel

11.

12. The complainant initially lodged the complaint regarding the promotional material

based on version 7.4 of the WASPA Code of Conduct, as published on 17 June

2009. In its initial submission, Opera Interactive noted that the promotional

scratch cards were printed prior to the publication of version 7.4 of the WASPA

Code of Conduct, and argued that clauses amended in version 7.4 should not be

applied retrospectively, specifically clause 11.1.2. The emergency panel reviewed

the timeline of the matter and agreed that in the interests of fairness,

consideration of the complaint should be made in terms of version 7.0 of the

WASPA Code of Conduct which came into effect on 25 March 2009 (and which will

be referred to in this submission as “the WASPA Code”), which was prior to the

printing and distribution of any of the relevant promotional materials. Oxygen

Marketing agrees with this approach.

13.

14. In respect of the complaint, the emergency panel concluded that –

15.

Annexure B

16. there is prima facie evidence of breaches of clauses 11.1.2, 4.1.1 and 4.1.2 of the

WASPA Code, and potential breaches of clause 9.1 of the WASPA Code; and

17.

18. the fact that no pricing appears in the immediate vicinity of the short code in the

text “SMS your code to 31979” underneath the scratch-off block is also a prima

facie breach of the WASPA Advertising Rules.

19.

20. In light of the above conclusions, the emergency panel made an order that Opera

Interactive, amongst other things, suspend the mechanism of entering the

competition and the mechanism of subscribing to the services advertised in the

relevant promotional material with immediate effect. The emergency panel further

prohibited Opera Interactive from initiating any new subscriptions in response to

the promotional material, and from levying any further charges on customers who

have already been added to the subscription services as a result of responding to

the promotional material.

21.

22. III A supplementary response from Oxygen Marketing

23.

24. Opera Interactive has already provided a response to the complaint, but in terms

of section 13.7.9 of the WASPA Code, the service provider is entitled to

supplement its previous response by taking into account any findings made by

the emergency panel. As the partner to Opera Interactive, Oxygen Marketing also

wishes to supplement the previous response submitted by Opera Interactive.

25.

26. Before addressing the conclusions reached by the emergency panel, both Oxygen

Marketing and Opera Interactive would like to once again emphasise their

willingness to work together with WASPA so as to resolve the issues. Oxygen

Marketing is also prepared to make any changes necessary to comply with the

latest version of the WASPA Code of Conduct, if WASPA deems the conduct of

Opera Interactive to be improper in any respect.

27.

a. Clause 11.1.2 of the WASPA Code

28.

29. The emergency panel held that there is a breach of clause 11.1.2 of the WASPA

Code in respect of the complaint. Clause 11.1.2 of the WASPA Code provides that:

30.

Annexure B

31. “[A]ny request from a customer to join a subscription service must be an independent transaction with the specific intention of subscribing to a service. A request from a subscriber to join a subscription service may not be a request for a specific content item.”

32.

33. Clause 11.1.2 of the WASPA Code (as opposed to version 7.4 of the WASPA Code

of Conduct), does not include the wording “and may not be an entry into a

competition or quiz”. As such, it is only necessary for Opera Interactive and

Oxygen Marketing to show that the request from a subscriber to join a

subscription service is not a request for a specific content item, but is in fact an

independent transaction with the specific intention of subscribing to a service.

34.

35. As such, Opera Interactive and Oxygen Marketing are not required to demonstrate

that a request from a subscriber to join a subscription service is not an entry into

a competition (as this is based on a subsequent version of the WASPA Code).

Nevertheless, Oxygen Marketing would like it noted that the request to join the

subscription service is, in any event, not an entry into a competition. The primary

reason for this is that the awards are pre-allocated when the scratch cards are

printed. Thus the request from the user will be primarily to join a mobile content

club, for which there is also a promotional campaign through marketing material

which, as a secondary motive, allocates awards to new subscribers.

36.

37. Oxygen Marketing does not dispute that the scratch card is a form of promotional,

marketing material which promotes the Star Promotions Club Subscription

Services. However, it was not (and is not) the intention of Opera Interactive or

Oxygen Marketing to coerce users into a subscription service on the premise of

claiming a prize or entering a competition. Firstly, Oxygen Marketing submits that

there is no competition that users are coerced into entering as it is clear that

users are not subscribing to the competition itself. Rather, all users who join the

Star Promotions Club Subscription Services will receive a benefit in some form or

manner. Furthermore, it is difficult to conceptualise the benefit as a prize as all

users who join by virtue of the promotional scratch card will receive the benefit.

There are thus no clear entry costs into the alleged competition as it is rather

conceptualised as a benefit upon subscribing to the content club.

38.

39. Furthermore, Opera Interactive and Oxygen Marketing have clearly indicated on all

of the promotional material that the services offered are “subscription services”.

This approach is elucidated by the wording on the front panel of the scratch card

which provides that:

Annexure B

40.

41. the scratch card provides that a potential customer is required to “[J]oin for your

chance to be awarded” a prize (underlined emphasis added);

42.

43. in the top right hand corner, it is clearly stated that “[T]his is a mobile

subscription service” (underlined emphasis added);

44.

45. in the top left hand corner, it is clearly indicated that this is a promotion for the

“Star Promotions Club Subscription Service” (underlined emphasis added);

46.

47. under the large scratch panel of the card it is clearly indicated that a potential

user must “subscribe and find out what your award is instantly” (underlined

emphasis added). As such, it is clear that the user would be required to first

subscribe by sending an SMS containing their code to a unique access number,

and would only then be eligible to receive a benefit, such as mobile games or a

car; and

48.

49. at the bottom of the scratch card, further details are provided for the subscription

service as follows: “Cost R14/2 days. SP Opera Interactive, for support call 083

916 3005. Unsub? Send STOP to 31905”, which details clarify that that this is a

subscription service for which there will be a set charge.

50.

51. The reverse side of the scratch card contains even more specific terms indicating

that the services offered are “subscription services” and not an entry into a

competition. This can be demonstrated with the following examples:

52.

53. How to play point 2, second sentence: “This will subscribe you to the Star

Promotions Club” (underlined emphasis added);

54.

55. the terms and conditions provide that “[T]his promotion is open to South African

residents aged 18 years and over who receive a promotional scratch card during

the promotional period and who agree to join the Star Promotions Club mobile

content services subscription service” (underlined emphasis added);

56.

57. the terms and conditions provide further as follows: “[C]ost of subscription R14/2

days”; and

58.

Annexure B

59. the terms and conditions note further that the “[F]ull promotion and subscription

terms and conditions” (underlined emphasis added) are available at

www.starpromotionsclub.co.za, and provide the user with the option of opting out

of the subscription service.

60.

61. In light of the examples given above, the promotional material (in the form of the

scratch card) clearly, prominently and explicitly identifies the services as

“subscription services”. There is no ambiguity in this regard, and Opera

Interactive and Oxygen Marketing have not attempted in any way to disguise the

fact that this is a subscription service. In fact, the scratch card is designed to

operate as a marketing tool to raise awareness of the Star Promotions Club

Subscription Services. In effect, the scratch cards provide potential users with an

opportunity to join the Star Promotions Club Subscription Services and to

simultaneously acquire an awarded benefit. As such, it is clear that the user

would be required to first subscribe by sending an SMS containing their code to a

unique access number, and would only then be eligible to receive a benefit, such

as mobile games or a car. The user has the choice not to subscribe and thus not

receive the pre-allocated benefit. It is respectfully submitted that a reasonable

user would not be misled into subscribing for a whole content service for the sole

purposes of receiving a pre-allocated benefit.

62.

63. Opera Interactive and Oxygen Marketing’s approach is further demonstrated by

the fact that there is a two-stage process in relation to the promotional material

and subscription to the Star Promotions Club Subscription Services. As such, it

is necessary for Oxygen Marketing to explain, as clearly as possible, exactly how

the two-stage process works.

64.

65. First of all, every user who joins the subscription content club will receive a

benefit upon joining the Star Promotions Club Subscription Services. The

particular benefit received is pre-allocated to every scratch card printed and

ranges from mobile games to a car. Once a user joins the content club such user

is sent the following welcome message: “Thx 4 subscribing 2 Star Promotions

Club. U get COOL wkly content. Help 0841951111 Unsub? Send STOP to 31979.

Cost 14R/2 days.” It thus immediately becomes clear that the user has joined a

subscription service and is given the option to unsubscribe or opt out of the Star

Promotions Club at this stage.

66.

Annexure B

http://www.starpromotionsclub.co.za/

67. Should the user decide to remain a subscriber to the subscription service, having

once again been given all the pricing information, such user has the choice of

sending a card with a unique number through to Star Promotions Club

Subscription Services. To re-emphasise that the user is now a subscriber of a

subscription service content club, such user will receive a monthly reminder

message which states: “You subscribed to Star Promotions Club. R14/2 days

from OM. To stop service, sms STOP to 31979 (Standard SMS Cost) Help? Call

0841951111”.

68.

69. As such, it is Oxygen Marketing’s submission that this clearly demonstrates that

the user will be joining a subscription service. The user can be under no

misapprehension that he or she is merely part of a competition and not

subscribing to a subscription service. The user is repeatedly told that he or she

will be joining (and subsequently, has joined) a subscription service. To allege

that the chance of winning a prize or participating in a competition serves as the

sole enticement for the user joining the subscription service is incorrect. It would

further be disingenuous to claim that it is inconceivable that the scratch card

system is legitimately a process designed as a marketing tool to promote the Star

Promotions Club Subscription Services. Opera Interactive and Oxygen Marketing

have at all times, and at all stages of the subscription and membership, done all

that is required to emphasise to potential users that this will be a subscription

service. Users are also given the opportunity to unsubscribe at any stage in the

event that such user feels that they might have been misled.

70.

71. As such, a reasonable subscriber will in all probability conclude an independent

transaction with Opera Interactive to join the Star Promotions Club Subscription

Services, while at the same time considering the award of the benefit.

Furthermore, while the single content, which is the benefit received upon

membership, is indeed part of the reason for joining the Star Promotions Club

Subscription Services, it cannot be claimed that it would be the sole reason,

particularly because the user is advised at every possible opportunity that the

primary content is a bundle of subscription services.

72.

b. Clause 4.1.1 and 4.1.2 of the WASPA Code

73.

Annexure B

74. The emergency panel held that the breach of clause 11.1.2 of the WASPA Code is

of such a nature as to also imply prima facie breaches of clauses 4.1.1 and 4.1.2 of

the WASPA Code.

75.

76. Clause 4.1.1 of the WASPA Code provides that “[M]embers are committed to

honest and fair dealings with their customers. In particular, pricing information

for services must be clearly and accurately conveyed to customers and potential

customers.”

77.

78. Oxygen Marketing submits that it has dealt honestly and fairly with its customers

in promoting a subscription service as discussed in paragraphs Clause 11.1.2 of

the WASPA Code (as opposed to version 7.4 of the WASPA Code of Conduct),

does not include the wording “and may not be an entry into a competition or

quiz”. As such, it is only necessary for Opera Interactive and Oxygen Marketing

to show that the request from a subscriber to join a subscription service is not a

request for a specific content item, but is in fact an independent transaction with

the specific intention of subscribing to a service. to As such, a reasonable

subscriber will in all probability conclude an independent transaction with Opera

Interactive to join the Star Promotions Club Subscription Services, while at the

same time considering the award of the benefit. Furthermore, while the single

content, which is the benefit received upon membership, is indeed part of the

reason for joining the Star Promotions Club Subscription Services, it cannot be

claimed that it would be the sole reason, particularly because the user is advised

at every possible opportunity that the primary content is a bundle of subscription

services. above. It has also clearly and accurately displayed the pricing

information for the services to both customers and potential customers at various

stages.

79.

80. At the bottom of the front of the scratch card (on which, it has been submitted, it

is clear that a subscription service is being offered), the cost has been clearly

provided as “R14/2 days”. If this is unclear, the customer or potential customer is

invited to contact SP Opera Interactive for support on a dedicated number.

81.

82. On the back of the scratch card, under the terms and conditions, the customer or

potential customer is once again informed that this will be a subscription service

for which the cost of subscription is R14/2 days.

83.

Annexure B

84. Upon sending an sms with the unique access code to a predetermined number,

the user becomes a member of the Star Promotion Club Subscription Service and

will receive a welcome message which specifically states that the cost will be R14

per two days.

85.

86. The user will also receive a monthly reminder message which states that such

user is subscribed to Star Promotions Club and that the cost of this subscription

service is R14 per two days.

87.

88. Thus, at all stages the user is informed of the applicable pricing and is afforded

the option of opting out if such terms and conditions are unacceptable. Oxygen

Marketing respectfully submits that it, together with Opera Interactive, has

provided adequate mechanisms to ensure that the customer is both aware of the

applicable pricing and is able to choose to unsubscribe at any time. In this

manner Opera Interactive and Oxygen Marketing are acting fairly and honestly and

have clearly and accurately communicated the price of the subscription service to

the customer or user, at all stages of the process.

89.

90. Furthermore, clause 4.1.2 of the WASPA Code provides that “[M]embers must not

knowingly disseminate information that is false or deceptive, or that is likely to

mislead by inaccuracy, ambiguity, exaggeration or omission.”

91.

92. For the reasons given above, Oxygen Marketing respectfully disputes that it has

knowingly disseminated information that is false or deceptive. Furthermore, a

reasonable person will not likely be misled nor is there any inaccuracy, ambiguity,

exaggeration or omission in terms of the promotional material in the form of the

scratch card. The Star Promotions Club Subscription Service is joined of a

customer’s own free will and initiative, having been provided with all the

necessary information. It is fair to allow Opera Interactive and Oxygen Marketing

to promote the subscription service by means of competitions and the awarding

of benefits, provided that all the necessary information is provided, which has

been done. The scratch cards, as published in the current format, amount to a

legitimate marketing tool and should not, in the circumstances, be penalised.

93.

c. Clause 9.1 of the WASPA Code

94.

Annexure B

95. In terms of the complaint, the emergency panel concluded that there is a prima

facie breach of clause 9.1 of the WASPA.

96.

97. Clause 9.1 of the WASPA Code deals with the provision of information for

competitions. We would like to emphasize at this point that this was never

intended to be a competition service, but rather a reward based subscription

service. Opera Interactive and Oxygen Marketing have structured the scratch

cards to form part of a promotional service which promotes the Star Promotions

Club Subscription. Furthermore the emergency panel did not specify which parts

of clause 9.1 have been breached. Nevertheless, for the purposes of these

submissions Oxygen Marketing will address clause 9.1 of the WASPA Code on the

assumption that a competition service is being provided. As such, Oxygen

Marketing has attempted to address all of the potentially contentious issues

below.

98.

99. Clause 9.1.1 of the WASPA Code provides that any promotional material for a

competition service must clearly display the full cost to enter the competition and

any cost to the user to obtain the prize. As discussed above, the customer or

user is advised of the full cost to enter the competition, as well as any cost to the

user to obtain the prize, at all stages of the process (see paragraphs The

emergency panel held that the breach of clause 11.1.2 of the WASPA Code is of

such a nature as to also imply prima facie breaches of clauses 4.1.1 and 4.1.2 of

the WASPA Code. to For the reasons given above, Oxygen Marketing respectfully

disputes that it has knowingly disseminated information that is false or deceptive.

Furthermore, a reasonable person will not likely be misled nor is there any

inaccuracy, ambiguity, exaggeration or omission in terms of the promotional

material in the form of the scratch card. The Star Promotions Club Subscription

Service is joined of a customer’s own free will and initiative, having been provided

with all the necessary information. It is fair to allow Opera Interactive and Oxygen

Marketing to promote the subscription service by means of competitions and the

awarding of benefits, provided that all the necessary information is provided,

which has been done. The scratch cards, as published in the current format,

amount to a legitimate marketing tool and should not, in the circumstances, be

penalised. above).

100.

Annexure B

101. Clause 9.1.2 of the WASPA Code provides that any promotional material for

a competition must include details of how the competition operates. This is

clearly discussed on the reverse side of the scratch card where it is indicated that,

to start, the user must scratch three identical award symbols. Recipients of an

award are then required to SMS the code to the PSMS number listed on the front

of the scratch card which will subscribe the user to the Star Promotions Club. If

the user, upon this information, chooses to subscribe to the Star Promotions Club

which, it is also indicated, is a club for subscription services, such user will then

receive a return SMS with a “Gift Claim Code”. The user will then fill out his or her

details on the scratch card, together with this “Gift Claim Code” and send it to

Star Promotions Club including a self-addressed stamped envelope for a valid

entry. There is no confusion on this explanation that the award is not intrinsically

linked to a subscription to the services of the Star Promotions Club.

102.

103. Upon a brief viewing of the reverse side of the scratch card, it also

becomes clear that all of the provisions of clause 9.1.4 of the WASPA Code have

been satisfied. Oxygen Marketing will not discuss all of these elements as this

assessment is based on a factual consideration of the promotional material, as

provided.

104.

105. Clause 9.1.6 of the WASPA Code provides that competition services and

promotional material must not use words such as “win” or “prize” to describe

items intended to be offered to all or a substantial majority of the participants.

Furthermore such material may not suggest that winning a prize is a certainty, nor

may it suggest that the party has already won a prize and that by contacting the

promoter of the competition, that the entrant will have definitely secured that

prize.

106.

Annexure B

107. Firstly, the scratch card does not suggest that winning a prize is a

certainty. In fact, a member will only receive a benefit if such member obtains

three matching symbols and subsequently opts to both join the subscription

service and complete the necessary procedure to obtain the benefit.

Furthermore, although the scratch card states that a party will be awarded a

benefit, there is no guarantee that an entrant will secure any specific prize. In

fact, the scratch card is clear in asserting that an entrant may be awarded a

variety of benefits, including a new car, a plasma television, cash prizes, mobile

games or even a holiday. However, no single prize is secured by any one entrant.

The benefit is pre-allocated, but will only be ascertained upon the user submitting

his or her Gift Claim Code.

108.

109. In addition, the scratch card has almost consistently refrained from using

the words “win” or “prize”. The wording on the front of the scratch card provides

that a user, upon joining, will stand a chance to “be awarded” (underlined

emphasis added) a variety of benefits. Furthermore the scratch card uses the

wording: “Congratulations. You have 3 matching symbols & will be awarded” and

“To subscribe and find out what your award is” (underlined emphasis added). It

is thus clear that this is an award or benefit, of a varying nature, awarded upon

joining which will be given to all participants who submit valid codes. On the

reverse side of the scratch card, the wording is also clear that the user will be

allocated a “Gift Claim Code”. There is only one instance where the reverse side

of the scratch card states that one can “claim your prize”. It is acknowledged that

such wording should not be used, but Oxygen Marketing respectfully submits that

in the circumstances it is clear that this is an award or benefit upon joining the

Star Promotions Club Subscription Services, and is not a random prize.

110.

d. The Advertising Rules

111.

112. The emergency panel concluded that the fact that no pricing appears in the

immediate vicinity of the short code in the text “SMS your code to 31979”

underneath the scratch-off block is also a prima facie breach of the WASPA

Advertising Rules. In particular, this appears to be a breach of a provision of

Chapter 8 of the Advertising Rules which provides that “for each unique access

number, the full and final cost of the access must be displayed immediately below,

or above, or adjacent to the unique access number in a non-serif font”.

113.

Annexure B

114. Oxygen Marketing always intended to Clearly & Accurately show the

pricing of the subscription service. If the placement of the pricing information was

displayed incorrectly it could be changed for any cards going forward.

115. The pricing is also clearly and accurately displayed in the welcome

message which the user gets prior to receiving their claim code

116.

117. IV Further considerations

118.

119. It is respectfully requested that WASPA consider that Oxygen Marketing

and Opera Interactive have committed a large amount of financial resources to

scratch cards and promotional material that have already been printed and

publication inserts that have already been paid for.

120.

121. It is further requested that WASPA consider that Opera Interactive and

Oxygen Marketing have not previously been found guilty of any contravention of

any provisions of the WASPA Code of Conduct, and has expressed its willingness

to cooperate with WASPA to resolve the issues should it ultimately be found to be

in contravention of the WASPA Code of Conduct.

122.

123. Oxygen Marketing further endeavours to ensure that it complies in all

respects with the WASPA Code of Conduct and the WASPA Advertising Rules in

all of its future promotional materials and subscription services.

Annexure B

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