Italy orders comparable pricing in Mobile phone ads

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ROME--In a rare ruling involving advertising, Italy's anti-trust authority passed a regulation that will will force cellular telephone advertising to base rate comparisons on a common standard.

The Italian anti-trust authority usually reserves rulings for cases involving price fixing or abuses of dominant market posiions, but its charter also allows it to step in when it perceives that the best interests of customers are at stake.

Italy's mobile phone market is second in the world only to the U.S. Italy is also the largest country in the world where cellular telephone accounts outnumber fixed-line telephone accounts.

Currently, it can be difficult for customers to compare prices, since ads quote rates sometimes using peak-hour prices, non-peak hour prices, weekend rates, rates per minute, per second, per tenth of a minute, per ten-minute block, both with value-added taxes included and without. Often, an asterisk will refer to fine print showing the quoted rate was valid only for the first days after service started, or only for a brief period of low cellular traffic.

"Precise, transparent and univocal advertising is the best way to supply customers with the information they need to compare prices and products and make informed choices," the authority said in a statement accompanying the ruling.

In addition to calling for a clear objective comparative standard for pricing as used in advertising, the authority said that all rates used must have value-added taxes already included in the quoted price.

Though consumer groups have applauded the measure, cellular companies say it was unnecessary.

"You can not say that in a country of 34 million cellular users that nobody understands the pricing structure," says Vittorio Colao, CEO of Omnitel, the second largest of Italy's four cellular operators.

Copyright July 2000, Crain Communications Inc.

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