Commission investigates Vodacom, Cell C over price hikes

Johannesburg - The National Consumer Commission has launched a probe into Vodacom and Cell C regarding their plans to increase voice and data prices, according to the Sunday Times.

The paper has reported that the National Consumer Commission is looking into Vodacom’s plan to hike contract prices on May 1, a move that sparked anger among its customers last month.

The Sunday Times also reports that the commission received three complaints about Cell C, which told customers in December that it planned to increase contract and prepaid tariffs from February.

"We are aware that many other consumers are affected by the actions of the mobile network service providers concerned," Trevor Hattingh, the commission spokesman, told the newspaper.

Hattingh did not disclose further details about its investigation.

However, the paper reports that “section 48 of the Consumer Protection Act, which prohibits a supplier from entering into an agreement with a consumer on terms that are unfair, unjust or unreasonable, may have been breached”.

The mobile networks are standing firm, though, as a Vodacom spokesperson said the company still plans to increase contract prices on May 1 while Cell C has also said that its contract and prepaid tariffs comply with the Act.

Meanwhile, a spokesperson for the the Independent Communications Authority of South Africa (Icasa) told the paper that mobile network licensees “are free to set their retail tariffs within the constraints of the competitive environment".

Price increases ‘legal’ - expert

Dismissing the legitimacy of the likes of Vodacom’s move to hike contract prices may be difficult.

Technology attorney Russel Luck, of SwiftTechLaw, told Fin24 last week that Vodacom’s move to increase prices could be deemed legal.

"Yes, a company can change its pricing unilaterally. The issue is if the particular price change is lawful in terms of relevant legislation," Luck told Fin24 last week.

"Contract terms are provided on a 'take it or leave it' basis where the mere use of services demonstrates a form of consent to those terms by that user. Before services were provided online, contractual terms were provided on a 'take it or leave it' basis in places like theme parks, car garages and hotels," Luck said.

"The users were deemed to 'accept' these contracts merely by using those services. Yes, the service provider can change the terms unilaterally. Whether that change of terms would stand up in court is an entirely separate issue," Luck added.

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