A mobile entertainment company that tried to tap into Bieber fever by offering premium subscription services to younger television viewers, including a Justin Bieber ringtone and mobile games, while branding them as one-time offers has lost an appeal against the competition watchdog.
Global One Mobile Entertainment Pty Ltd and a related company, G6, appealed against the Australian Competition and Consumer Commission last year after it was fined more than $375,000 for broadcasting the ads while only showing very fine print explaining they were ongoing purchases.
The decision not only underlines the competition regulator’s vigilant enforcement of the telecommunications codes, but also comes just after the industry adopted a new code with stricter advertising practices.
Get business news first
Sign up to SmartCompany’s daily newsletter
Justices Greenwood, Logan and Yates of the Federal Court upheld the previous decision made by Justice Bennett, saying the ads were deliberately made to entice younger viewers into buying subscription services.
The initial judgment noted “it is not in dispute that Justin Bieber is a very successful young singer…who was and is extremely popular with young girls in the 13 to 15-year-old age group”.
Global One Mobile attempted to defend its subscription services by pointing out all the relevant text was included at the bottom of the screen. But the court found it would be “easy to miss or disregard” the writing given it was so small.
“Even if the viewer was aware of or noticed the writing, it is, in my view, highly unlikely that the viewer would read it rather than watch everything else on the screen,” the court found last year.
These subscription services amounted to several hundreds of thousands of dollars over time.
And given the advertisements were directed towards younger viewers – and played outside of school hours – the court found it would be highly unlikely that a person under the age of 15 would read or notice that text.
The company attempted to appeal based on several grounds, including the original court’s emphasis on younger viewers, and that it did not actually intend to mislead the public.
But the judges said this did not matter.
“Put simply, the advertisement featuring Justin Bieber’s song as a ringtone operates as a hook to induce a consumer to respond to the advertisement and sign up for it in circumstances which actually involve an ongoing subscription for that ringtone and other music, videos, games or other things, which is not made plain by the dominant impression the advertisement leaves on the mind of a consumer acting reasonably.”
The appeal has been dismissed with costs.