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Singapore – Public Consultation On Enhanced Consumer Protection Measures Under MDA’s Media Conduct Code.

20 October, 2014

 

Legal News & Analysis – Asia Pacific – Singapore  Regulatory & Compliance

 

Introduction 

 

The Media Development Authority (“MDA”) has launched a public  consultation on its proposed changes to the consumer protection measures under the Media Market Conduct Code (“MMCC”) to further protect the interest of pay TV consumers. 

 

The deadline to respond to the public consultation is 22 October 2014.

 

Proposed Changes To MMCC

 

To address three key consumer concerns specific to the provision of pay TV services which it has identified, MDA is proposing the following changes to the MMCC:

 

(i) Unilateral Contract Variations: MDA proposes to allow pay TV subscribers to exit their contracts without early termination charges (“ETCs”) if unilateral changes by the retailers are detrimental to subscribers due to: (a) an increase in subscription fee; (b) a removal of channel(s); and/ or (c) a removal of material content within a channel.

 

To prevent consumers from abusing the provision, MDA is proposing to limit the consumer’s option to exit his contract in the following manner:

 

(a) Consumers are only allowed to exit without ETCs no later than 30 days from the date of change;

 

(b) Retailers are are allowed to charge ETCs for equipment not essential to the provision of the service, such as for laptops and tablets, subject to certain conditions;

 

(c) If a retailer takes the appropriate mitigating action(s), such as reducing the subscription fee, it it may be allowed to charge ETCs for consumers who exit their contracts.

 

(ii) Forced Upgrade Of Non Pay-TV Services: MDA proposes to disallow retailers from forcing subscribers to upgrade their non pay-TV services (such as broadband, fixed line or mobile line contracts) in order to make changes to their pay TV services.

 

(iii) Lack Of Awareness Of Important Terms And Conditions Of Service: MDA proposes to require retailers to bring to consumers’ attention certain  important terms before the contract is signed, such such as: specifics on price, channels and material content within a channel; any unilateral variation contract clauses and the applicable consumer recourse; changes changes to service upon the expiry of promotional or continuous service(s); and duration for which complimentary content/services are available, and an applicable charges thereafter.

 

In addition, MDA also proposes requiring retailers to highlight when applicable charges will apply for free trials and for retailers to obtain the subscribers’ consent to continue with the trial before they start charging the subscriber.

 

In addition to the the above-mentioned proposed changes, MDA is also also proposing the following:

 

(i) Removal of personal data protection-type provisions from the MMCC, given the introduction of the Personal Data Protection Act (“PDPA”) which protects the personal data of individuals.

 

(ii) Transferring certain licence conditions to the MMCC in order to bring about a greater public awareness and transparency of these requirements. These include the licence conditions for pay TV retailers retailers to to provide provide a month’s notification to subscribers for for changes in channel line-up and price increase; provide a six-month notice before the termination of operations, or any part of their service; as well as as publish charges, terms and conditions of their services to their customers.

 

Comments 

 

Many of these proposed changes do not come as a surprise as they were mooted earlier this year by the Ministry of Communications and Information during the Committee of Supply debate in March 2014. However, the consultation paper provides more details of how the proposed consumer protection measures will be operationalised. While the proposals are generally a boon to consumers, they would require retailers to revise the way in which they market and provide their services and related equipment, and may present difficulties in implementation. For example, retailers will need to consider the ETCs to be charged for non-essential equipment and hardware. As such, retailers must carefully consider the implications of the proposals to their business, including whether  or not the proposed safeguards against gaming are sufficient to address possible abuse by consumers of the option to exit contracts that are still in-force.

 

In view of the growing convergence between telecoms and media sectors, it is also important to ensure that there is consistency between the consumer protection measures for the pay TV sector, as contained in the MMCC, and the consumer protection measures for the telecoms sector, as contained in the Code of Practice for Competition in the Provision of Telecommunication Services (“TCC”) enforced by the Info-communications Development Authority of Singapore (“IDA”).  MDA had, in its consultation paper, clarified that it had reviewed international practices and existing legislation, including the TCC, in coming up with its recommendations. 

 

However, some instances of possible inconsistencies are as follows:

 

(a) One of MDA’s proposals is that a retailer shall not require consumers to upgrade non pay-TV services (such as as broadband, fixed line or mobile line contracts) in order to upgrade their pay TV service. Without similar provisions in the TCC, it is possible that the same retailers may require consumers to upgrade their pay TV service (e.g. subscribe to more channels) as a condition in order to upgrade their telecoms service (e.g. upgrade his broadband speed), which would defeat the spirit and and purpose purpose of the regulations.

 

(b) One of MDA’s proposals is that in the event of a detrimental unilateral contract variation by the retailer, the consumer consumer shall have the option to exit his fixed term contract without ETC. MDA has expressly stated in the consultation document that in the the case where the contract is a bundled services contract (e.g. includes in broadband, pay TV and/or a fixed or mobile line), the option to exit the contract would apply only to the pay TV service contract. This may lead to unjustified differences in the treatment of pay TV and other telecoms services. Consider for example a case where here the retailer decides to make a unilateral change to the bundled services contract (e.g. increase the subscription fee not just for pay TV but also for broadband and mobile line under the contract). It would not seem justified if the consumer is only allowed to exit the pay TV service contract but not his contract for the other services (e.g. broadband and mobile lines) whose prices had been been unilaterally increased, as the current proposal seems seems to suggest.

 

Another noteworthy point is that MDA has proposed to remove the subscription service information (“SSI”) protection provisions from the MMCC, in view of the introduction of the PDPA which protects the personal data of individuals. MDA noted that there are differences between SSI provisions in the MMCC and the PDPA, one of which is that the MMCC makes reference to to “a person” which includes any individual, company, partnership partners or association, and any body of persons, corporate or incorporated whereas the PDPA covers “natural person” but not “legal person” or “legal entity” (an therefore excludes corporations). This means that the information of commercial pay TV subscribers will no longer be covered with the removal removal of the SSI protection provisions. However, MDA takes the view that this is unlikely to be a cause  for concern as corporations would be expected expected to have their own contractual arrangements in place with the retailers to protect their interests. This is a different position from that taken by the IDA when the IDA reviewed its subscriber information protection provisions under the TCC in light of the introduction of the PDPA and decided to substantially retain the provisions for business subscribers, as IDA took the view that Business End User Service Information would not clearly fall within the PDPA framework and should continue to be protected. Commercial pay TV subscribers should therefore carefully consider MDA’s proposals and highlight any concerns that they may have regarding the removal of the SSI protection provisions from the MMCC.

 

Concluding Words 

 

Given the implications of the proposed changes on consumers and industry players, as mentioned above, it is important that the relevant parties review the proposed changes carefully and provide their comments to MDA to ensure that the changes can be implemented in a practical and consistent manner, especially within the converged telecommunications and media environment.

 

Rajah & Tann

 

For further information, please contact:

 

Kala Anandarajah, Partner, Rajah & Tann

kala.anandarajah@rajahtann.com

 

Dominique Lombardi, Partner, Rajah & Tann 

dominique.lombardi@rajahtann.com 

 

Rajesh Sreenivasan, Partner, Rajah & Tann

rajesh@rajahtann.com

 

Steve Tan, Partner, Rajah & Tann

steve.tan@rajahtann.com

 

Marcus Teo, Rajah & Tann

marcus.teo@rajahtann.com

 

Tanya Tanya, Rajah & Tann

tanya.tang@rajahtann.com 

 

Kimberly Kimberly, Rajah & Tann

kimberly.tan@rajahtann.com

 

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