Stay on sections of mobile code


A BODY representing providers of premium services to mobile phones has secured a High Court order putting a stay on sections of a new code of practice for the industry due to be introduced tomorrow.

Phone Paid Services Association Ltd (PPSA), which represents more than 50 providers of premium-rate services (PRS) such as text-based competitions, charity donation services, peer-to-peer chat services, ringtones and video clips, claimed the new code would immediately put them out of business and allow foreign firms to 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 practice is required to protect consumers and improve confidence in the sector and that the application is an abuse of process, as similar proceedings between the parties are 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 the PPSA permission to bring a challenge against sections of the new code. He made orders staying certain sections of the new code which the plaintiffs argue will put them out of business. The remaining parts, not subject to the proceedings, come into being tomorrow, 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 satisfied damages would not be an adequate remedy, and the balance of convenience favoured the granting of the stay. He rejected Comreg’s claims the plaintiffs’ action amounted to an abuse of process, or that their action had been brought out of time. The stay, the judge said, would remain in place until further order.

The full hearing of the judicial review proceedings will be at a later date.

In their action, the PPSA, Modeva and Zamano seek various orders including one staying Comreg’s decision of April 5th last to introduce the new code of practice. They want the code, or certain sections of it, to be reassessed.

The plaintiffs claim the new code would significantly increase their costs and customer acquisition rates. These would make their business unviable and result in their immediate closure.

The sector had been regulated under a code introduced in 2008, similar to codes in other EU states. The new regulations are more severe than what is in operation in other jurisdictions, it is claimed. The new code would only apply to Irish-based PRS providers and not to those located in other EU countries. The plaintiffs also claim they would not be able to upgrade their technology in time to meet the June 5th deadline.

Lawyers for Comreg denied all the plaintiffs’ claims. The lawyers claim Comreg has received thousands of complaints relating to PRS from the public, and that the sector needs to be regulated. Ultimately the code will be to the benefit of the industry, it claims.