When ‘Unlimited’ really means LIMITED!

In 2012 Melita used the term ‘Unlimited’ to promote certain Melita services.  However, in reality the services were limited

This case relates to the contestation by Melita Limited (‘Melita’) of a decision taken by the Director General (Consumer Affairs) within the Malta Competition and Consumer Affairs Authority (MCCAA) whereby the Director General imposed an one off administrative fine of 5,000 euros and a daily fine of 120 euros on Melita – an electronic communications service provider – because of advertisements which the Director General considered to be misleading. This contestation was filed before the Competition and Consumer Appeals Tribunal (the Tribunal). Subsequently the Malta Communications Authority (MCA) intervened in the proceedings before the Tribunal.[1] Melita has since lodged an appeal before the Court of Appeal (Superior) contesting the Tribunal’s decision. The intervention and decision of the Director General (DG) came about after a complaint made by the Malta Communications Authority in 2012 with the DG whereby the MCA argued that advertisements by Melita promoting some of its products as being ‘unlimited’ were factually incorrect and misleading and therefore constituted unfair commercial practices and were in breach of the Consumer Affairs Act.[2]   Melita subsequently contested the DG’s decision including the fines imposed before the Tribunal. One of the main arguments made by Melita that any ‘limitations’ on the service were because of the application of fair usage policies intended to ensure that the use of the service does not impact other subscribers negatively. The Tribunal rejected the arguments by Melita noting that in the advertisements produced as evidence the words ‘unlimited’ and ‘without limits’ were written in prominent fonts whereas the words indicating that ‘terms and conditions apply’ or that ‘an acceptable usage policy’ applies, were written in very small fonts and placed in a corner of the advert. The Tribunal said that while it does appreciate the purpose behind the acceptable usage policy and the fair usage policy, Melita cannot advertise a service without limits when in reality limits exist, this irrespective of the number of clients impacted by such limits. The Tribunal decided not to uphold Melita’s claims, confirming the decisions taken by the Director General as per his decision of the 11th October 2012.

[1] The Tribunal is composed of a judge who presides and two lay technical members.

[1] The MCA as a ‘qualified entity’ under the Consumer Affairs Act, made a formal request to the Director General requesting him to issue a compliance order against Melita since it contended that Melita was acting in breach of Part VIII of the said law which regulated unfair commercial practices.

 

Outcome of the Expert Meeting in Malta

On the 13 and 14 March 2017 BEUC held two meetings of the 2nd Enforcement Steering Group & Redress Expert Meeting in Malta. The first session discussed various enforcement issues, including specific cases, which BEUC is currently investigating through the collaboration of various consumer organisations members of BEUC. These cases included the campaigns related to ‘connected toys’ with a presentation by NCC BEUC’s Norwegian member. Other cases discussed involved practices concerning Pokeman Go and the use of the so-called ‘floor clauses’ in mortgage (home loans) agreements. The group also discussed briefly recent developments relating the Volkswagan emissions case.

In the second session the BEUC secretariat prepared a presentation focusing on the impact of internet on consumer choices and what steps can be taken to ensure that consumers are better informed when buying through the internet. In this regard various suggestions were discussed focusing on more coordinated action between member associations including sharing of information and of possible unfair practices. In this context presentations were made relating to new initiatives relation to enforcement cooperation, the General Data Protection Regulation and the work relating to the International Consumer Protection and Enforcement Network.

The second day focused on collective redress with a tour de table amongst those present updating measures in each member state concerning collective redress. Following a presentation by BEUC as to the possible issues that can be raised to promote more effective means of collective redress through the EU, a lengthy discussion ensued as to what requests should be made to the EU in this regard including the feasibility of having a directive in place to ensure that certain minimum measures are adopted.

The Consumer Association – Malta is always represented in these Expert meetings as apart from the collective actions that we participate we also take advantage of the expertise in this group to learn how other consumer organisation tackle consumer issues that Maltese consumer face.

Welcome

The Consumers’ Association wish to welcome the participants to the Second Enforcement Steering Group Meeting & Redress Expert Meeting which is being organised by BEUC in Malta.

We wish every success to this meeting as the subjects to be tackled during the meeting are of direct interest to Maltese consumers.  Amongst them one finds the developments in the VW case and further enforcements action by BEUC members.  Another topic to be discussed is enforcement in the field of internet of things which also includes connected toys, an example of which is My friend Cayla which we featured some months ago.

Mothercare – the first step has been take but….

Geoblocking restricts the rights of consumers to buy from wherever they want.  Online shopping facilitated shopping across borders – something which for a small country like ours is vital for the consumer as the choice is limited and prices are high.  This opportunity to buy online put pressure on local providers to increase choice and reduce prices.  However, online shopping also made it easier to restrict shopping across borders as it is easier to identify the location of the consumer and thus block.

During the past year, within the EU steps were taken to restrict geo-blocking.  However, enforcement, as usual, is weak.  At the beginning of January, the Association tested two sites – Marks & Spencer and Mothercare.  In both cases, we noticed that Maltese consumers were not allowed to shop from the UK websites.

The Association wrote to both Marks & Spencer and Mothercare protesting that geoblocking on their sites is discriminating against Maltese consumers and we informed both that we would be launching a campaign against them.   In both cases, it was noted that when one tried to shop from their websites, one is in the final stages of ordering a product and is asked to insert the location where the products should be sent, Malta was not included on the list of countries where products could be delivered.

We are glad to note that in the case of Mothercare the first steps to end geoblocking had been taken.  In the case of Mothercare, one could ask for the products to be sent to Malta.

However, this is only the first step.  The attraction of  Mothercare website has been marred as one would still not be able to buy many of the offers.  Apart from this, the postage charges that they are asking are exorbitant and in most cases higher than the product itself.

As we said the first steps had been taken but it is a long way to ensure that consumers would really benefit from the Single Market.

AGM – 2017

Consumer’s Association

Annual General Conference 2017

 

The Annual General Conference will be held on Tuesday 28 March 2017 at Associations’ office, South Street Valletta at 6.00pm.

Nominations for the post of Chairman, General Secretary, Financial Secretary and Members on Council will be received from registered members till 24 ta’ March 2017.  Nominations are to be signed by the nominated person, the person nominating the candidate and another member and be sent to the General Secretary 47A South Street Valletta.

 

E Chetcuti

Ghaqda tal-Konsumaturi

10 March 2017

Marks & Spencer – discriminates against Maltese consumers

Geoblocking is supposed to have finished but most firms who have at least an outlet in Malta still continue this practice.  Marks & Spencer is one of them.  In the coming weeks we would also mention other firms which discriminate against consumers who live in Malta.

Geoblocking has several detrimental effects.  On a European level, it disregards the objective of working towards a Single Market.  On a national level, it discriminates against consumers on the basis of nationality.  Consumers in such situations as in Malta would be both restricted in the choice and also have to pay a higher price.  The range of products and special offers which are offered online are usually much wider.  Apart from this, the products are not the latest that the firm offers and the prices are much higher.

As we said Marks & Spencer discriminates against consumers who live in Malta.  On visiting the site (http://www.marksandspencer.com/), everything is normal until one reaches the insertion of the address.  As one opens the country, one finds that Malta is missing (see picture).  Thus one will not be able to continue with the purchase.

We wrote to Marks & Spencer but to date, we did not receive any reply.  We will continue our pressure on such traders who discriminate against consumers who are living in Malta.

On your part, would you continue to buy from a firm or its local outlet which discriminates against you?!

 

3rd March 2017

Consumer Wins

The months of January and February 2017 can be marked as two months which were synonymous with consumer wins in the telecommunications area.  This is the result of the work which had been done behind closed doors by the Maltese Presidency both in Malta and in Brussels.

The first consumer win was with regard to roaming charges.    In October 2015 the EU decided to abolish retail roaming fees as of June 2017. But there was one final step for that new rule to be applicable: wholesale markets needed to be reformed.  In the meantime pressure started mounting on the EU by telecom operators to postpone and keep roaming charges high.

In June 2016 the European Commission published a proposal to reform the wholesale market. In just 7 months, the EU co-legislators agreed on this reform. Consumer organisations, including ours, are quite satisfied with the end-result. The new wholesale price caps are as follows:

o   Voice: 3.2cents/min

o   SMS: 1cent/min

o   Data:

  • 2017: 7.7€/Gb
  • 2018: 6€/Gb
  • 2019: 4.5€/Gb
  • 2020: 3.5€/Gb
  • 2021: 3€/Gb
  • 2022: 2.5€/Gb

This was a result of the work done by the Maltese Presidency which took over from the Slovakian Presidency at the beginning of this year and made this challenge as a key political priority.  This involved working up a deal between the institutions. This was not an easy task especially as some big member States such as Germany and France have been very strongly pushing against a significant decrease of these wholesale prices.

The significance of this deal can be seen from the fact that at April 2016 consumers used to pay 200€ for 1 GB of roaming data.  As from June they will be paying 7.7€/Gb.

The second win which occurred in the beginning of February deals with online subscriptions when travelling.  More and more consumers pay for subscriptions to watch TV series or listen to music.  Currently, consumers are often blocked from accessing their paid-for music streaming, video game or video-on-demand services when travelling to another EU country.

However, a deal which was reached at the beginning of February between European Parliament and Member State representatives would allow consumers who travel to another EU country to use their online subscriptions – for instance their Amazon Prime or Netflix streaming service – when abroad.

These new rules will apply to all current and new subscriptions without extra charges or time limits.

Monique Goyens, Director General of The European Consumer Organisation (BEUC), commented:

“This is very good news for EU consumers. Artificial barriers blocking you from using your online video, music or game subscription contradict the very principle of a single market. Today we are getting one step closer to a digital single market that delivers for consumers.”

Now that roaming fees are becoming a thing of the past people will really benefit from their paid-for content when travelling.

 

 

 

Best Wishes

The Council  of the Consumers’ Association – Malta wishes all consumers a Happy Christmas and a prosperous New Year.

Be Careful! Internet connected toys

Christmas is near and most have already started buying presents.  These when directed at children are usually toys and the latest most advanced are usually the most attractive and the first choice.

This year internet connected toys were introduced on the European Market and though locally, as far as we know, are not available they can be obtained online.   Recently, the Norwegian Consumer Council (NCC) examined three toys Hello Barbie, My Friend Cayla and i-Que.  The first two are dolls and are directed at girls while the third is a robot directed at boys.

In its analysis at the terms and the technical features NCC found that there is a serious lack of understanding of children’s rights to privacy and security.

The toys fail at several points

In their review of the toys, the Consumer Council has found several serious issues:

  1. Lack of safety
    With simple steps, anyone can take control of the toys through a mobile phone. This makes it possible to talk and listen through the toy without having physical access to the toy. This lack of safety could easily have been prevented, for example by making physical access to the toy required, or by requiring the user to press a button when pairing their phone with the toy.

 

  1. Illegal user terms
    Before using the toy, users must consent to the terms being changed without notice, that personal data can be used for targeted advertising, and that information may be shared with unnamed 3rd parties. This and other discoveries are, in the NCC’s opinion, in breach of the EU Unfair Contract Terms Directive, the EU Data Protection Directive and the Toy Safety Directive.
  1. Kids’ secrets are shared
    Anything the child tells the doll is transferred to the U.S.-based company Nuance Communications, who specialize in speech recognition technologies. The company reserves the right to share this information with other third parties, and to use speech data for a wide variety of purposes.
  2. Kids are subject to hidden marketing
    The toys are embedded with pre-programmed phrases, where they endorse different commercial products. For example, Cayla will happily talk about how much she loves different Disney movies. Meanwhile, the app-provider has a commercial relationship with Disney.

Consumer tips

  1. If you do not want the toy, check if the shop accepts returns. You can cancel the purchase within 14 days if you bought the toy online.
  1. Not happy with the toy? Let the shop and the producer know what you think. This might prevent toys with similar shortcomings from entering the market.
  1. Talk to your child about what the toy is and what it can do, and what it means that the toy is connected to the Internet.
  1. Check how the toy responds to questions. The toys come with many pre-programmed phrases, but can also get answers from Wikipedia.
  1. Remember to turn off the toy when not in use, so you have control over who connects to the toy.

You may view the video about the risks of internet connected toys HERE.

The following are the two reports published by the Norwegian Consumer Council.

toyfail_report_desember2016

2016-11-technical-analysis-of-the-dolls

BEUC delegation meet Malta Presidency

On the 25th November, the European Consumer Organisation (BEUC) and its Maltese member Ghaqda tal-Konsumaturi met Dr Helena Dalli, Minister for Social Dialogue, Consumer Affairs and Civil Liberties to present their expectations for Malta’s EU Council Presidency. During the meeting, the consumer delegation asked Minister Dalli to advance consumer interests in the Digital Single Market and to make enforcement of consumer rights a top priority for the EU.

In light of the 25,000 deaths attributed each year to antimicrobial resistance, BEUC and its Maltese member organisation stressed that the two pending EU proposals on veterinary medicines and medicated feed should be adopted swiftly in order to tackle the misuse of antibiotics in livestock.

Örjan Brinkman, president of The European Consumer Organisation (BEUC), commented:

“The European Commission wants to make the EU fit for the digital age. This will however only happen if consumers trust the digital economy and can choose from the best offers online. Concretely, consumers should be able to access the online goods and services of any trader in the EU. It is hardly a Digital Single Market if traders can erect artificial barriers to the detriment of consumers.

“It is common knowledge – and not just since the VW scandal – that company misbehaviour usually does not stop at the border. To reign in rule-breaking companies and bring justice to consumers, it is crucial that enforcers work together. We want the Maltese government to help wrap up the pending EU proposal on the cross-border infringements of consumer rights.”

Benny Borg Bonello, president of the Consumers’ Association of Malta, said:

“The EU law that will make everyday consumer protects safer and strengthen market surveillance has been inexplicably stalled for the past three years. The risks of exploding tumble dryers and toxic toys are real. We are counting on the Maltese government to break the gridlock.”

beuc                                                                                       ghaqda-logo

 

One can view the document prepared for the Malta Presidency here.