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
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© 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:
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(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].
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© 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]
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