mBlox has also been ordered to pay refunds to the 338 people who complained to the regulator, mostly because they had misunderstood the subscription service, wrongly supposing that they had signed up to a one-time charge when in fact they found themselves paying GBP3 per week to download the famous ring-tone.

mBlox says it may seek judicial review because it neither created nor promoted the content, which was originated by Verisign subsidiary Jamba! who will in fact pay the fine on behalf of mBlox. “This is a contractual arrangement we have with all our clients, and all our clients understand that” says mBlox.

The ICSTIS Hearing Panel found that the promotions required a lot of interpretation, application and patience from consumers. It observed that a great deal of thought had gone into producing the ads – but little time appeared to have been spent on the terms and conditions. These omitted significant information and were unclear about what the service entailed.

“The Hearing Panel has made clear that consumers should not be made to work to find out what any premium rate service involves or costs,” explained ICSTIS Director George Kidd. “Although the Panel found that there was no fraudulent or malicious intent behind the service, the companies concerned showed a careless disregard and unprofessional attitude to consumers in failing to be clear on the exact nature of the service.”

mBlox, which says it is the world’s largest mobile transaction network for business-to-consumer SMS, made the following statement:

'ICSTIS has ruled that advertising run by Jamba!, up until July 2005, and promoting services including the ‘Crazy Frog’ ringtone, misinformed the public as to the type of service the public were buying. mBlox fully accepts ICSTIS’ adjudication on the appropriateness of the Crazy Frog promotion. mBlox is considering requesting a judicial review of the interpretation of the ICSTIS code that has held mBlox responsible for the action of a third party such as Jamba!

'This is a fast-evolving industry in which regulations are regularly reviewed and improved so as to protect consumers in the best manner possible. Accordingly, ICSTIS’ Code is currently undergoing review. mBlox has made representations to ICSTIS that in future the regulatory framework should make the people who create and promote mobile content, the content (information) providers, accountable for the content transmitted to consumers and the marketing practices they adopt. Given mBlox’s specialised role in the mobile business value chain, mBlox believes that ICSTIS should be empowered to regulate the content providers directly.

'Improvements in the regulation of the industry since July have significantly reduced the problem of misleading advertising. mBlox has played an important role in helping to clarify and implement the regulation of this area through its role in industry associations such as the Mobile Entertainment Forum.

' mBlox manages a mobile transaction network that facilitates message delivery and financial settlement between content providers and the mobile operators. Content providers advertise the brand in a variety of media and provide the service. When their content is requested by consumers, the content provider connects to a transaction network, such as that operated by mBlox, which then processes the transactions via the mobile operator networks. A central part of mBlox’s business strategy has always been to not create or promote content.

'mBlox will continue to play a full part within the regulatory framework to support ICSTIS and ensure, as far as possible, that the regulations are not breached by any content provider that supplies services to the public.'