CLIENT UPDATE 2014 OCTOBER COMPETITION / MEDIA Public Consultation on on Enhanced Consumer Protection Measures under MDA’s Media Market Conduct Code 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 Octo 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: 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: to (a) an increase in subscription fee; (b) a removal of channel(s); and/ or (c) a removal of material mate 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 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 may be allowed to charge ETCs for consumers who exit their contracts. (ii) Forced upgrade of non pay-TV pay services:: MDA proposes to disallow retailers from forcing subscribers to upgrade their non pay-TV pay TV services (such as broadband, fi 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 service: MDA proposes to require retailers to bring to consumers' attention certain important terms before the contract is signed, such as: specifics on price, channels and material content within a channel; any unilateral variation contract clauses and the applicable consumer recourse; changes to service upon the expiry of promotional or continuous service(s); and duration for which complimentary content/ services are available, and 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’ ibers’ consent to continue with the trial befo before they start charging the subscriber. subscriber 1 © Rajah & Tann Singapore LLP CLIENT UPDATE 2014 OCTOBER COMPETITION / MEDIA In addition to the above-mentioned above proposed changes, MDA is also proposing the following: (i) Removal of personal data protection-type protection type provisions from the M 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 greater public awareness and transparency of these requirements. These include include the licence conditions for pay TV retailers to provide a month's notification to subscribers for changes in channel line line-up and price increase; provide a six-month six month notice before the termination of operations, or any part of their service; as well 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 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 their services and related equipment, and may present nt difficulties in implementation. For example, retailers will need to consider the ETCs to be charged for non-essential non equipment and hardware. As such, retailers etailers must carefully consider the implications of the proposals to their business, including whether 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 the telecoms and media sectors, it is also importan important to ensure that there is consistency between the consumer protection measures for the pay TV sector, as contained in the MMCC, MMCC, and the consumer protection measures for the telecoms sector, as contained in the Code of Practice for Competition in the Provision Provision of Telecommunication Services (“ (“TCC”) enforced by the Info-communications 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 TCC, in coming up with its recommendations. However, some ome instances of possible inconsistencies are as follows: 2 (a) One ne of MDA’s proposals is that a retailer shall not require consumers to upgrade non pay pay-TV services (such as broadband, fixed line or mobile line 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 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 shall have the t option to exit his fixed term contract without ETC. MDA has expressly stated in the consultation document that in the case where the contract is a bundled services contract (e.g. includes broadband, pay TV and/or a fixed or mobile line), the option to eexit 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 the retailer decides to make a unilateral change to the bun bundled services contract (e.g. increase the subscription fee not just for pay TV but also for broadband and mobile line under the contract). Itt 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 unilaterally unilaterally increased, as the current proposal seems to suggest. © Rajah & Tann Singapore LLP CLIENT UPDATE 2014 OCTOBER COMPETITION / MEDIA 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 reference to “a person” which includes any individual, company, partnership or association, and any body of persons, corporate or incorporated whereas the PDPA covers “natural person” but not “legal person” or “legal entity” (and therefore excludes corporations). This means that the information of commercial pay TV subscribers will no longer be covered with the removal of the SSI protection provisions. provisions. However, MDA takes the view that this is unlikely to be a cause for concern as corporations would be expected to h 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 oduction 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. Commerci 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 ecially within the converged telecommunications and media environment. Email us at [email protected] or at [email protected] if you would like to discuss any of the points raised in this update further. Please feel free to also con contact the Knowledge and Risk Management Group at [email protected]. 3 © Rajah & Tann Singapore LLP CLIENT UPDATE 2014 OCTOBER COMPETITION / MEDIA Contacts Kala Anandarajah Partner Head, Competition & Antitrust Practice Rajesh Sreenivasan Partner, Head, Technology, Media & Telecommunications Practice D (65) 6232 0111 0 F (65) 6428 2192 2 D (65) 6232 0751 F (65) 6428 2204 [email protected] Dominique Lombardi Partner (Foreign Lawyer) Steve Tan Partner D (65) 6232 0104 F (65) 6428 2257 D (65) 6232 0786 F (65) 6428 2216 [email protected] [email protected] Tanya Tang Principal Economist Marcus Teo Associate D (65) 6232 0298 F (65) 6225 0747 D (65) 6232 0723 F (65) 6428 2247 [email protected] Kimberly Tan Associate D (65) 6232 0273 F (65) 6428 2287 [email protected] 4 [email protected] © Rajah & Tann Singapore LLP [email protected] Our regional presence Our regional contacts RAJAH & TANN Singapore China Rajah & Tann Singapore LLP 9 Battery Road #25-01 Straits Trading Building Singapore 049910 T +65 6535 3600 24 HR +65 9690 2253 F +65 6225 9630 sg.rajahtannasia.com Rajah & Tann Singapore LLP Shanghai Representative Office Unit 1905-1906, 1906, Shui On Plaza, 333 Huai Hai Middle Road Shanghai 200021, People's Republic of China T +86 21 6120 8818 F +86 21 6120 8820 cn.rajahtannasia.com R&T SOK & HENG RAJAH & TANN NK LEGAL Cambodia R&T Sok & Heng Law Office Vattanac Capital Office Tower, Level 17, No. 66 Preah Monivong Boulevard, Sangkat Wat Phnom Khan Daun Penh, 12202 Phnom Penh, Cambodia T +855 23 963 112 / 113 F +855 963 116 kh.rajahtannasia.com *in association with Rajah & Tann Singapore LLP 5 RAJAH & TANN REPRESENTATIVE OFFICE © Rajah & Tann Singapore LLP Myanmar Rajah & Tann NK Legal Myanmar Company Limited Office Suite 007, Inya Lake Hotel No. 37, Kaba Aye Pagoda Road, Mayangone Township, Yangon, Myanmar T +95 9 73040763 / +95 1 657902 / +95 1 657903 F +95 1 9665537 mm.rajahtannasia.com ASSEGAF HAMZAH & PARTNERS Indonesia RAJAH & TANN Thailand Assegah Hamzah & Partners Menara Rajawali 16th Floor Jalan DR. 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