Chapter 5 Facilitating Market Competition and Strengthening Consumer Protection
Handling of and Investigations into Telecommunications Complaints about Misleading or Deceptive Conduct
Section 7M of the TO, which prohibits misleading and deceptive conduct by telecommunications licensees, was repealed upon the commencement of the Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 on 19 July 2013. As a transitional arrangement, if a licensee was engaged in misleading or deceptive conduct at a time prior to the implementation of the amended TDO, such conduct would still be regulated and dealt with under section 7M of the TO. Between 1 April 2014 and 31 March 2015, OFCA assisted the CA in handling 81 complaint cases under section 7M of the TO. One of these cases was confirmed as infringement of the TO, resulting in the imposition of a financial penalty of $150,000 by the CA on the licensee concerned.
Handling of and Investigations into Competition Complaints in the Telecommunications and Broadcasting Sectors, and Merger & Acquisition Cases in the Telecommunications Sector
Between 1 April 2014 and 31 March 2015, we assisted the CA in considering 13 complaint cases under section 7K, 7L or 7N of the TO, which prohibits anti-competitive conduct by telecommunications licensees. All the cases were closed after due consideration, with no further investigations. During the same period, we assisted the CA in considering two complaint cases under section 13 or 14 of the BO, which prohibits anti-competitive conduct by broadcasting licensees. After due consideration, all cases were closed with no investigation opened.
We also considered two cases under section 7P of the TO, which oversees merger and acquisition activities involving carrier licensees, and concluded that no issue was raised that required commencement of investigation under section 7P.
Handling of and Investigations into Complaints about Contravention of TDO
The amended TDO came into full implementation on 19 July 2013, extending the coverage of the TDO from goods to services, prohibiting specified unfair trade practices, and providing for an enhanced enforcement mechanism (collectively known as “fair trading sections”).
The CA is conferred concurrent jurisdiction with the C&ED to enforce the fair trading sections of the TDO in relation to the commercial practices of licensees under the TO and the BO directly connected with the provision of telecommunications and broadcasting services. The two enforcement agencies have issued enforcement guidelines for traders and consumers as to the operation of the fair trading sections, and entered into a memorandum of understanding to co-ordinate the performance of their functions under the amended TDO.
From 19 July 2013 to 31 March 2015, OFCA received a total of 1 486 complaints under the TDO. Of these complaints, 1 155 were closed due to insufficient evidence to suspect/establish a contravention, or they fell outside the scope of the TDO; 105 complaints were closed after the CA issued advisory letters to the licensees concerned to bring to their attention the subject matter and advise them of the need to improve their relevant commercial practices in relation to the sale or supply or promotion of telecommunications or broadcasting services to consumers; and the remaining 226 complaints were under process at various stages.
Enforcement of the Unsolicited Electronic Messages Ordinance
Under the UEMO, we have established three Do-Not-Call (“DNC”) Registers for facsimile messages, short messages and pre-recorded telephone messages. Commercial electronic messages must not be sent to registered numbers unless the senders have obtained consent from the registered users. By March 2015, more than 2.7 million numbers were registered with these three DNC Registers. Apart from the need to respect the wishes of the registered users of the DNC Registers, senders of commercial electronic messages are also required under the UEMO to comply with a number of sending rules. For example, they must provide their contact information and an “unsubscribe facility” in their commercial electronic messages so that the recipients can approach the sender concerned and indicate their wish not to receive further commercial electronic messages.
In 2012/13, 2013/14 and 2014/15, the total number of reports received in relation to suspected contraventions of UEMO were 2 410, 1 998 and 2 068 respectively. Although the number of reports in 2014/15 was comparable to that of 2013/14, we observed a progressive shift of spamming activities from the traditional means of faxes and pre-recorded voice messages to the use of mobile messaging applications to send short messages. We will continue to monitor the compliance situation on various platforms and streamline the procedures for more effective enforcement.
If the number of reports received against a sender is below a certain threshold, we will issue an advisory letter reminding the sender to observe the requirements under the UEMO. If the number of reports received against a sender exceeds the threshold, or if we continue to receive reports against the same sender after the issuance of an advisory letter, we will conduct a formal investigation and may issue a warning letter to that sender. In 2014/15, a total of 270 advisory letters and 49 warning letters were issued.
In the event of repeated contraventions by the senders of commercial electronic messages, we may issue enforcement notices under section 38 of the UEMO, directing the sender to take steps to remedy the offences. Anyone who fails to comply with the enforcement notice may be liable to a fine of up to HK$100,000 on the first conviction. In 2014/15, we issued an enforcement notice to a sender. During the period, we have been actively pursuing a sender of an identical short message promoting a tutor referral service via the WhatsApp Messenger platform on the Internet, which cumulatively resulted in over 1 000 reports submitted to OFCA.
Preparation for the Implementation of the Competition Ordinance
Passed by the Legislative Council on 14 June 2012, the CO provides a cross-sectoral competition law prohibiting anti-competitive conduct in all sectors when it has the object or effect of preventing, restricting or distorting competition. Under the CO, the CA is conferred concurrent jurisdiction with the CC to enforce the Ordinance in respect of the conduct of telecommunications and broadcasting licensees, including merger and acquisition activities involving carrier licensees in the telecommunications sector. Upon commencement of the CO, the competition provisions in the BO and TO will be repealed, subject to transitional arrangements.
OFCA has been assisting the CA in close liaison with the CC on preparatory work required before the commencement of the CO. In October 2014, the CA and the CC jointly issued a set of six draft guidelines on the enforcement and interpretation of the CO and solicited views and comments from the business sectors and the general public. Having considered comments received from the consultation exercise, the CA and the CC jointly issued revised draft guidelines for comments in March 2015. The Legislative Council was also consulted on the revised draft guidelines on 27 April 2015. The CA and the CC issued the final guidelines in July 2015 having taken into account comments received on the revised draft guidelines. With the Government gazetting a commencement notice appointing 14 December 2015 as the full commencement date of the CO, OFCA will continue to assist the CA in completing all the necessary preparation work for the full implementation of the CO, including liaising with the CC to prepare the memorandum of understanding to be entered into between the CA and the CC to co-ordinate the performance of their functions under the concurrent jurisdiction arrangement.
Consumer Education Programmes
In 2014/15 we continued our efforts to raise public awareness of intelligent use of communications services. The annual consumer education campaign (“the campaign”) under the theme “Smart Use of Communications Services” was carried out from August 2014 to April 2015. Nine roving exhibitions were held at different locations across the territory, conveying consumer messages to the general public through informative display panels and a number of interactive games and activities. A series of advertorials in the form of comic strips were also published in two newspapers to disseminate the same consumer messages. Four public seminars, as well as 10 talks at centres for the elderly and community centres were conducted in cooperation with various non-government-organisations to educate the public on how to protect and use mobile phone data and services wisely. In addition, a one-minute TV Announcement in the Public Interest (“API”) was produced to publicise consumer tips in relation to the 3G spectrum reassignment exercise. The broadcast of the API was arranged on various free and pay TV channels.
In view of the popularity of smartphones among young people, we also arranged a number of activities targeting secondary students, including the staging of 20 interactive drama performances cum mini exhibitions as well as organising a photo storytelling competition at secondary schools to encourage active participation of the youngsters. We will continue to run the campaign in the year ahead and try to reach out to a wider spectrum of the community.
Publicity Initiatives to Promote the Role & Functions of the CA and OFCA
In order to strengthen the community’s understanding of the role of the CA as the statutory regulator for the communications sector in Hong Kong and the professional support given to the CA by OFCA as its executive arm, a series of publicity initiatives were conducted during the year. They included the production of a corporate video to present the achievements of the communications industry in Hong Kong and the role and functions of the CA and OFCA; the introduction of a new column “OFCA Close-up” on OFCA’s website to inform the community of the activities of OFCA; organising visits for students to the Radio Monitoring Unit of OFCA to enhance their understanding of OFCA’s role in the management of radio communications and the prevention of radio interference in Hong Kong; organising career talks for tertiary students to introduce various civil service grades in OFCA; and participating in public talks held under the Government’s “Science in the Public Service Campaign”. We will continue to undertake similar publicity initiatives in 2015/16.