COM 558: Opinion Paper Google and Taiwanese government at odds over Android Market refund Background The Android Market Team of Google issued an important change to paid apps in Taiwan On June 28, 2011. Recently, the Taipei City Government announced that mobile app stores--including Android Market--would be required to provide a seven day refund window for all paid apps. Therefore, we wanted to let you know that we are suspending paid apps in Taiwan while we continue to discuss this issue with the Taipei City Government. (Open letter to consumers from The Android Market Team of Google) What happened was Smartphone users in Taipei city had complained that they were unable to claim a refund if they downloaded and feel unsatisfied about it. The Taiwan Consumer Protection Act requirement of a free-trial period of at least seven days for items purchased is originated from mail-order merchandise which consumers cannot feel or touch the goods before ordering. The seven-day-period also considers time for shipping. Internet was included in the category of Mail Order Purchase Rules in Consumer Protection Act in the amendment to the Consumer Protection Act proclaimed in 2003. Taipei’s Law and Regulation Commission informed Google Taiwan, as well as Apple Asia, of the complaints in a formal letter, demanding an explanation and an outline of improvements by the date of June 23rd of deadline. Apple Asia responded before the deadline and amended its refund policy to comply with Taiwan’s by extending its trial period from 15 minutes to a full seven days. However, Google rejected and argued from the letter, “Android Market already provides a 15-minute refund period for all paid apps--which reflects the fact that apps are delivered over-the-air instantly and most users who request a refund do so within minutes of their purchase. We believe this policy helps consumers make educated decisions about the apps they buy while enabling developers to manage their businesses effectively.” Few days later, Google said via its lawyer that it would not to follow Taiwan’s consumer protection law to amend the terms of service on the Android Market. Taipei
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City Government officials have given Google another two weeks to deliberate its decision, allowing Google Taiwan to communicate with the headquarter to resolve the issue amicably. It turned out that Google refused to follow the Act and suspended all the paid apps without warning. Thus, Taipei city found Google $34,480 for Consumer Protection Act violation. The city government said the suspension was a move to “coerce Taiwanese consumers into giving up their rights”. According to a report on the website of nasdaq.com, On January, 2013, Taipei High Administrative Court last week decided to revoke the case, saying the city government shouldn't interfere in a dispute between a firm and consumers. The progress is still ongoing. Support and Oppose Arguments Purchasing apps for mobile devices is a trend that has only recently emerged in Taiwan. This study is going to examine the controversy of Taiwan’s Consumer Protection Act applied to digital content products, proper apps refunding consideration time, influences of Google suspension on app developers and provide suggestions. People who support the Taipei city government consider that The Consumer Protection Act requires a free-trial period of at least seven days for items purchased is reasonable. Supporters compared apps as personal computer software since some software provide even longer free-trial period and survived in the market. The point is if the apps are good enough, the developers don’t have to worry about lost due to the abuse of refund. The policy could also encourage more competitive paid apps. In fact, many consumers in American forums complained that they cannot test apps and complete the refund application within 15 minutes due to too much misleading description. As a result, it makes users less likely to make the purchase in the first place. Google might have to rethink the policy of the proper time for consumers instead of suspending the service. Taiwanese users are angry because they were left in the dark as the search engine giant removed the paid app section from its online store. At the same time, only having free apps without paying choice, Google makes its own apps market in Taiwan less competitive. By looking through the comments on the Internet, I found out that most of the people oppose the seven days free-trial period in Taiwan are developers. Since the
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profits are mainly from the charges, it would be difficult for developers to make the profits if the users private the apps or complete games and ask for refunds. Free apps profits obtained from four ways: Additional service including advanced function or game treasures, advertisements, cooperation with some companies and a trial aims to paid version. However, if developers are not well-known, it would be hard for the developers to get advertisements or cooperation in the beginning. Furthermore, once the users hold fluky mentality to download and repeat refund, developers essentially could not get any profits. The worst situation would be a knock-on effect that would influence the whole apps industry. As developers who would have the enthusiasm to develop more apps? We are not willing to lost developers in this booming industry. Also, more foreign developers might step back of Taiwan’s market. On the surface, we agree that the 7-day-free-trial period protects consumers’ right. However, if cooperation refused to enter or withdraw Taiwan’s market due to the Act, consumers would have less choice.

Discussion Digital products on network, such as software, online movies, e-books, music, don’t have entity, which impose a challenge to apply Mail Order Purchase Rules in Consumer Protection Law on digital products. I believe The Android Market Team of Google could have had better strategic decision but since the incident had occurred, maybe we would focus on how the act should amend due to digital products particular characteristics. Taipei County's Legal Affairs Bureau pointed out that Europe Union new Consumer Rights in 2011 also extend online shopping withdraw days to 14 calendar days to support its standpoints, The EU Directive on Consumer Rights states that: The period under which consumers can withdraw from a sales contract is extended to 14 calendar days (compared to the seven days legally prescribed by EU law today). This means that consumers can return the goods for whatever reason if they change their minds. The withdrawal period will start from the moment the consumer receives the goods, rather than at the time of conclusion of the contract, which is currently the case. The rules will apply to internet, phone and mail order sales, as well as to sales outside shops, for example on the consumer’s doorstep, in the street, at a Tupperware party or during an excursion organized by the trader.
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It is apparent that the law is slightly different from explanation. So far most of the reports cite the claim but ignored the following specification. In fact, The EU Directive on Consumer Rights also writes that: Digital goods, such as music, films or software programmes, will also be exempted from the right of withdrawal. The sale will be regarded as irreversible from the moment downloading begins. When cancelling a service, for example when a painter has done only half the job, the consumer should pay a share of the bill equivalent to the proportion of the work already done by the service provider. It is obvious that the specification because the download has begun cannot support Taipei County's Legal Affairs Bureau’s statement. I think it is not really matter about the calendar days but the features of apps influence the evaluation time. Some apps simply cost longer to evaluate. One of the solutions is we could let the developers decide the trial time since they know their apps best. For example, a simple game which is easy to beat, 15 minutes would be adequate for consideration; a solid and complex app might provide longer time (e.g., 1hour or 24hours) to evaluate. Consumer should be given the flexibility to make the decision which works best for them. This would in turn accumulate users’ trust and loyalty to the products and will provide benefits to the developers. On the opposite, though Apple Asia complied with Taiwan’s 7-day-free-trial period, the actual operation is very complex and often makes consumers deterred. App Store’s policy is that no refunds unless the app proved unavailable to download after payment or technical problems happened. Apple doesn’t guarantee refunds but take request case by case. Besides, Apple doesn’t provide refund service in Chinese which means consumers who are not good at English will be blocked. Overall, I think the most important mission for The Consumer Protection Act is to clearly stipulate companies provide an easy complain or refund channel. For consumers, it is extremely time consuming and energy consuming to locate the refund links and make international calls. Therefore, instead of arguing superficial issues like the trial time, governments should require cooperation to provide the clear and efficient refund channel to protect consumers’ right.

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Reference Matt Brian.(2011, July15). Google faces second fine over Taiwanese Android app refunds. Retrieved from thenextweb.com: http://thenextweb.com/google/2011/07/15/google-set-for-second-fine-over-taiwaneseandroid-app-refunds/ Jason Tan (2011, Jun 28). Google pulls paid apps from Taiwan after being fined. Retrieved from taipeitimes.com: http://www.taipeitimes.com/News/front/archives/2011/06/28/2003506866 Jerry Hildenbrand (2011, Jun 27). Google and Taiwanese government at odds over Android Market refund window. Retrieved from androidcentral.com: http://www.androidcentral.com/google-and-taiwanese-gov-odds-over-android-marketrefund-window Ben Woods (2011, June 27). Google removes paid Android apps from Taiwan. Retrieved from news.cnet.com: http://news.cnet.com/8301-1035_3-20074740-94/google-removes-paid-android-apps-f rom-taiwan/

Dow Jones Business News (2013, January 04 ). Taiwan City to Appeal in Google Dispute. Retrieved from nasdaq.com: http://www.nasdaq.com/article/taiwan-city-to-appeal-in-google-dispute-20130104-00 026#.UQLMfR3nV6R European Commission (2011, November 22). The Directive on Consumer Rights. Retrieved from ec.europa.eu: http://ec.europa.eu/justice/consumer-marketing/rights-contracts/directive/index_en.ht m

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