Airtel, Star TV, to pay Rs10 million for unfair trade

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In a decision highlighting the business interests behind television contests that are conducted via short message service (SMS), the National Consumer Disputes Redressal Commission (NCDRC), the apex body for consumer disputes, has recently held Star Plus TV and Bharti Airtel (India’s largest mobile operator) guilty of adopting unfair trade practices, in Society of Catalysts v Star Plus TV and Bharti Airtel Ltd.

Indian_girl_with_mobileAs a voluntary consumer organization, the society filed a complaint against the alleged unfair trade practices adopted by Star Plus and Bharti Airtel, accusing these companies of misleading viewers about a contest – Har Seat Hot Seat (HSHS) – which had been aired directly following Kaun Banega Crorepati (KBC), the Indian version of the hit show, Who Wants To Be A Millionaire.

In the HSHS contest, aired at the end of each episode of KBC, a question was shown and viewers were asked to send their answers via text messages or phone calls on the Airtel network. A prize of Rs200,000 (US$4,000) was given to one person (selected by a lucky draw) who provided the correct answer after each show. Airtel charged Rs2.40 per text message, higher than the normal charge of Rs1.

After investigating the records, the NCDRC found that 58 million text messages were sent by participants in the HSHS contest, thereby netting Rs139.2 million for Airtel. Of that amount, prizes worth Rs10.4 million were distributed, leaving a gross profit of Rs128.8 million. The NCDRC found that Star Plus and Bharti Airtel did not make it clear to the public that the prize money for HSHS would be paid out of the money collected from their text messages.

Even though the companies argued that participation in the contest was voluntary, the NCDRC held that keeping the viewers unaware of these details was an unfair trade practice.

The NCDRC ruled that, based on the advertisements and onscreen displays for the HSHS contest, no consumer could have imagined that the prize money and other costs of the contest were being met through the money charged by Airtel for the text messages. The NCDRC ruled that contestants had been led to believe the prize money was offered free of charge.

The NCDRC held that the companies had violated the provisions of section 2 (1) (r) (3) of the Consumer Protection Act, 1986, thereby adopting unfair trade practices. The two companies were directed to pay joint and several damages of Rs10 million, to be deposited to the consumer welfare fund.

The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at [email protected], [email protected] or [email protected] Readers should not act on the basis of this information without seeking professional legal advice.