Consumer Watchdog Questions Commerce Commission’s Vigilance

07/10/2008 10:36

The Consumer Council of Fiji questions the vigilance of the Commerce Commission in enhancing consumers interests while encouraging a competitive and monopolistically free telecommunications environment in Fiji. Simply, the Council feels that the Commerce Commission has been greatly ineffective in regulating and enforcing the provisions of the Commerce Act 1998. The Council comments come in light of the laid back and unresponsive attitude of the Commerce Commission towards consumer complaints about the Vodafone Fiji organised and run text promotions in the country. 

In increasing numbers, consumers have been urging the Council to address the issue of Vodafone’s text promotion competitions. The Council is concerned that the Vodafone text promotions, that are illegal in nature, according to Section 34 (1) of the Commerce Act are being allowed to continue by the Commission. Where is the vigilance that consumers look for in this highly regarded consumer protection agency? 

Section 34(1) states that – “A person must not supply any controlled goods or services unless a price for those goods or services has been authorized by the Commission and the goods and services are supplied in accordance with the authorization.” Making reference to this provision in the Act, the Council acquired the lastest Telecommunications Determination by the Commerce Commission to sight for any approval by the Commission permitting Vodafone Fiji to organize and conduct text promotion competitions. As expected, there is no mention of permitting Vodafone Fiji or any other company, including the media outlets to conduct text promotions. There is no mention of an approved rate to be charged for text promotions either. As such, the Council believes that all those who promote text messaging competitions and are charging a different and higher rate than the approved 20 cents for normal texting is engaging in an illegal activity.

The Council met with the Commerce Commission Executive Director Mrs Miliana Racule on the subject who confirmed that the text rate used by Vodafone in its ‘Car Razy’ promotion competition

was not approved by the Commission nor was any approval given for running such promotions. The Commission is aware of the fact that Vodaone Fiji is engaging in text promotion competition without approval and yet they failed to take any proactive or drastic steps which the Commerce Act empowers them with.  The Commission seems to be oblivious to their own telecommunications determination. The Commission should have been alert on the issue and acted accordingly when Vodafone had carried out its first ever text promotion competition.

It is sad for consumers to think that the Commission exists to protect their interest and welfare when the non-action and unresponsive attitude has allowed Vodafone Fiji to continue promoting text competitions and rake in millions at the expense of unwary consumers. In addition to running their own competitions, Vodafone is raking in another set of money from media outlets and companies who promote text competitions to consumers. Media outlets are famous for running text promotions whereby radio stations charge 50cents per text and Fiji TV charges $1.00. 25 cents of the 50 cents and 50cents from the $1.00 respectively goes back to Vodafone Fiji. Essentially, Vodafone Fiji gets to be the overall winner of the millions that is generated via text promotions. Consumers are clearly being targeted as victims of daylight robbery but in an unsuspecting manner.

Vodafone Fiji seems to work like an alarm clock in the morning with a wake up call encouraging consumers to send text messages NOW and enter into its ‘Car Razy’ promotion. These messages bombard consumers twenty-four-seven. It goes into every home and to every individual who is on the Vodafone Fiji network. Advertisements appear on almost every medium including the three local newspapers, radio, TV, and cell phones. Simple calculation will show that with 700,000 active Vodafone accounts in Fiji by one text each per day at $1.98 results in the generation of $9,702,000.00 for a week. Given the amount of money Vodafone Fiji is generating through just one text per person (exclusive of the possibility of consumers sending multiple texts in a day), handing over car keys to consumers is not considered generous gifting at all by the Company.

It is Commerce Commission’s duty to regulate and control price of such monopolistic industries in Fiji and in this instance (contest/promotion) is no different. Failure to do so signifies that not only has the Commission failed to diligently carry out its statutory duties and functions but has failed to reprimand corporations like Vodafone Fiji for making false claims and getting away with it. As the regulator of the subject matter the Commission is mandated to protect consumers from unfair trade practices so that multinational corporations like Vodafone Fiji are bound to conduct their business affairs ethically without cheating or exploiting consumers in the country of their operation – in this instance, a small, developing country like Fiji.

The Council considers Vodafone’s unapproved engagement in conducting text promotion competitions, including those run by media outlets as a very serious offence. These organizations and Vodafone Fiji should be taken to task for generating money from consumers illegally. The Council demands the Commission to direct the Vodafone Fiji to provide redress in the form of compensating consumers their money which the Company took under false pretences.

The Consumer Council therefore urging the Commerce Commission to take immediate steps to notify the public and consumers of the reality surrounding text promotions and the related price determination (or not) for Vodafone’s contest and promotion. Thereafter, we implore that if Vodafone has indeed made false claims, they should be reprimanded within the ambit of the Commerce Act. In the past incidences Vodafone has unfairly bulk billed consumers but managed to get away with it with no action whatsoever from the Commission. To allow them to get away this time with no penalty will deem the Commerce Commission as a weak regulator.

The Council urges the Commission to immediately act to stop the ‘Car Razy’ promotion and charge Vodafone under the Commerce Act and also under the Fair Trading Decree for intentionally misleading consumers by making false claims and misrepresentation.