A BODY representing Irish companies providing premium services to mobile phones will be immediately forced out of business and its market taken over by foreign firms if a new code of practice for the industry is introduced, the High Court has heard.
Phone Paid Services Association Ltd (PPSA), which represents more than 50 providers of premium rate services such as text-based competitions, charity donation services, peer-to-peer chat services, ring tone and video clips, has brought a legal action aimed at preventing ComReg’s new code of practice for the industry from coming into force on June 5th next.
The Commission for Communications Regulation (ComReg), which regulates the sector, opposes the action brought on behalf of the PPSA and two other Irish-registered PRS providers, Modeva Interactive and Zamano Plc. ComReg claims the new code of practice is required in order to protect consumers and improve confidence in the sector.
The court heard that ComReg 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, ComReg claims. The State has applied to the court to be joined as a notice party to the proceedings.
Yesterday Diarmuid Rossa Phelan SC, for PPSA, Modeva and Zamano, said the new regulations would radically transform the regulatory landscape.
The new code would significantly increase their costs and customer acquisition rates. Counsel said these additional costs would make their business unviable and result in their immediate closure.
Counsel also said the new code will have serious consequences for those who breach it. Previously the sector was regulated under a code introduced in 2008, which was similar to codes in other EU state. The new regulation is more severe than what is in operation in other jurisdictions.
The new code would only apply to Irish-based PRS providers and not to those located in other EU countries. The effect of the code would result in the Irish providers being eliminated and their business being taken over by foreign-based competitors, which counsel said amount to as discrimination.
He also told the court that due to the costs involved, the companies would not be able to upgrade their technology in time to meet the deadline.
The case continues.