In October last year two traders of smartwatches for children – Gator and Xplora – were requested to meet with the Consumer Authority Norway after acting in breach of the Marketing Practices Act. The smartwatches sold by the two companies make it possible for parents to track their children and to call directly to the child’s watch. Both companies had been using illegal marketing activities when promoting their products. In addition the traders had several unfair terms in their general terms and conditions.
The traders i.a. failed to give crucial and essential information about monthly costs, the total amount of payment, delivery costs and information about the lock in period. Furthermore the consumer was bound to one mobile provider, with the consequence that it was not possible for the consumer to change SIM card and switch to another provider. Several marketing campaigns also appealed to parents natural fear of anything bad happening to their children. In addition the traders failed to present their marketing in such a way that it is clear that it is marketing.
Cases against Gator and Xplora closing
Gator and Xplora made a great number of changes to their products. This led the Consumer Authority Norway to close their cases against the traders.
– Prior to our case handling the advertisements contained product claims stating that the functionality of the products was much better and safer than it really is. After the changes made by the companies it is much easier for consumers to understand what kind of device they are actually getting when purchasing such a smartwatch for children, says Elisabeth Lier Haugseth, Director General at the Consumer Authority Norway.
– Furthermore one of the traders reduced their set of terms and conditions from 16 pages to about 5-pages and at the same time changing the language from English to Norwegian.
Director General Haugseth adds that the advertisement for smartwatches for children no longer appeals to parents natural fear of anything bad happening to their children. In addition the traders have made it possible for the consumer to use third party SIM cards issued by other mobile providers.
The Norwegian Data Protection Authority and the Norwegian Communications Authority has also assessed issues with the smartwatches regarding privacy and quality assurance. The cases against the smartwatch traders have illustrated the need for coordination and cooperation between authorities to make sure that internet connected devices are safe to use.
The marked for smartwatches for children is complex with several traders and products. If necessary the Consumer Authority Norway will consider opening additional cases.
The importance of supervision
Watches, dolls, fridges and other internet connected things get more and more common. Many of the new internet connected products open for new opportunities for consumers. At the same time there are many examples of products that don’t meet minimum standards regarding consumer law, data protection and security.
– I think it is of great importance that authorities follow the technological development in order to protect consumer’s and particularly children’s rights when using new internet connected devices, says minister of Children and Equality, Linda Hofstad Helleland.
The Ministry of Children and Equality have instructed the Consumer Authority Norway to prioritize supervision of digital issues this year.
– I am pleased to see that the work on digital issues seems to give results, says the minister.
Internet of Things
The Consumer Authority Norway works to ensure that consumers using these kinds of devices are presented with all the statutory information about the products, that consumers don’t get mislead by incorrect information in marketing, or bound to unfair terms. The results from the recent negotiations with the two traders of smartwatches will be important also for the work with such devices in the future.
– It is important that consumers have access to clear terms. At the same time, the terms must not be unfair, e.g. by locking the consumer to one mobile provider. We want to study the market more closely and help to ensure that the internet of things does not become a market where consumers are faced with misleading marketing practices or locked to one operator, says Elisabeth Lier Haugseth the Director General at the Consumer Authority Norway.