Premium-rate service providers win order to stay sections of new code
A body representing providers of premium services to mobile phones have secured a High Court order staying sections of a new code of practice for the industry due to be introduced next Tuesday.
Phone Paid services Association Ltd (PPSA) which represents more than 50 providers of premium rates services (PRS), such as text based competitions, charity donation services, peer-to-peer chat services, ring tone and video clips, claimed the new code would immediately put them out of business and allow foreign firms take over the market.
The action brought by the PPSA and two other Irish registered PRS providers Modeva Interactive and Zamano Plc is against the Commission for Communications Regulation (Comreg), which regulates the sector.
Comreg and the State had opposed the application.
They claim the new code of practise is required in order to protect consumers and improve confidence in the sector.
It also claimed the application was an abuse of process as similar proceedings between the parties are currently before the Commercial Court.
In his ruling at the High Court late on Saturday evening Mr Justice Kevin Cross said he was prepared to grant PPSA permission to bring a challenge against sections of the new code from the PRS sector.
The Judge made orders staying certain sections of the new code which the plaintiffs argue will put them out of business. The remaining parts of the new code that are not subject to the proceedings will come into being on June 5th.
The Judge said he was satisfied the plaintiffs had made out an arguable case and had crossed the low threshold required to grant leave to bring proceedings.
He was also satisfied damages would not be an adequate remedy, and that the balance of convenience favoured the granting of the stay.
He rejected Comreg’s claims the plaintiff’s action amounted to an abuse of process, or that their action had been brought out of time.
The stay, the Judge added will remain in place until further order.
The full hearing of the judicial review proceedings will be determined at a later date.
In their action PPSA Modeva and Zamano are seeking various orders including one staying Comreg's decision, made on April 5th last to introduce the new code of practise.
They want the code, or in the alternative certain sections of the code re-assessed.
The plaintiffs claim the new code would significantly increase their costs and customer acquisition rates. These additional costs would make their business unviable and result in their immediate closure.
Previously the sector was regulated under a code introduced in 2008, which was similar to codes in other EU state. The new regulations are more severe than what is in operation in other jurisdictions, it was claimed.
The new code would only apply to Irish based PRS providers and not to those located in other EC countries.
It would result in Irish providers being eliminated and their business being taken over by foreign based competitors, it was claimed.
In addition the plaintiffs claim they would not be able to upgrade their technology in time to meet the June 5 deadline.
Lawyers for Comreg denied all of the plaintiff’s claims.
Comreg’s lawyers claimed it has received thousands of complaints relating to Premium Rate Services from the public, and that the sector needs to be regulated.
Ultimately the code will be to the benefit of the industry, it claims.
