MTN haunted by competition woes

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 07 Sept 2009

The Advertising Standards Authority of SA (ASASA) has called MTN's controversial SMS competition a vehicle for profit-making.

MTN launched the competition at the end of April to celebrate its 15th birthday and it was expected to run until 9 August. However, the company shelved the competition after a spate of media and user allegations.

The competition was a quiz-based system where entrants answered trivia via SMS to gain points, with SMSes costing R7.50 each. The more points accumulated, the more likely the entrant was to win a prize.

Several allegations emerged around the way MTN conducted the competition and several customers spent thousands of rands attempting to win the prizes. Another storm surfaced a few days later, when it was alleged some of the competition winners had access to a list of entrants and each person's score.

Six customers took the matter to the ASASA, saying the competition was misleading, specifically in terms of the costs. The complaint explained that while the competition SMS cost R7.50, there was no indication that an additional R7.50 would be charged for every SMS thereafter.

The authority has upheld the complaint, although it has not yet handed down its sentence.

“The respondent is no stranger to the ASA and its disciplinary committees. It knew, or ought to have known, that the competition constituted an advertisement and should have ensured that it complies with the code,” explains the ASASA's ruling document.

It goes on to say that it should have been handled by an advertising agency and not the company contracted to run it as a lottery-style competition. “This adds to the view that this was no more to celebrate 15 years of MTN's existence than to generate a huge income by luring subscribers and other people into entering a lottery-type competition.”

MTN's defence was that the competition stipulated that “each SMS cost R7.50”. The company also says the terms and conditions of the competition were made widely available to entrants.

At the time, the competition's terms and conditions stated: “The promoter is not responsible for entrants overspending by sending too many SMS entries.”

MTN also submitted to the ASASA that “all entrants knew by the second SMS that they were playing a game, and by implication, multiple SMSes would have to be sent”.

However, the authority says entrants could not be “expected to scrutinise the terms and conditions on the Web site or mobi site”. The ASASA says customers would have expected the cost of the competition to be R7.50 and not higher.

“For many such reasonable viewers, the MTN claws had already clasped them after they had made the first SMS,” the ruling says. The ASASA has not yet handed down punishment to MTN.

MTN had not responded to ITWeb's questions by the time of publication; however, it indicated it is reviewing the ruling.