Apple has been in the news recently, following an update to its iTunes and App Store terms of use. The Guardian and other media outlets, have reported on a change to its terms for EU countries, which allows customers to cancel a purchase within 14 days.
The Consumer Contracts Regulations 2013
Apple have made this change in order to comply with new EU consumer protection regulations, which came into force on 13 June 2014. The regulations require that, where digital content is purchased via distance means (i.e. online or over the telephone), the customer is given a no-quibbles right to cancel the contract and receive a full refund if they contact the seller within 14 days. The customer must also be informed of this right, in writing (e.g. via terms & conditions).
The regulations also set out an important exception to the right to cancel. The customer will waive the right to cancel by choosing to download or stream the digital content within the 14 day cancellation window, provided that they have been told they will lose the right to cancel as a result and they have explicitly acknowledged this.
The guidance to the regulations says that it is not enough to mention the exception in your terms & conditions and rely on the customer’s acceptance of those terms.
Apple’s Implementation of the Regulations
Apple’s terms of use do refer to this exception: “You cannot cancel your order for the supply of digital content if the delivery has started upon your request and acknowledgement that you thereby lose your cancellation right.”
However, referring to the exception isn’t enough. The regulation guidance says that the seller must take further steps to notify the customer of the consequences of downloading the app before the 14-day period expires and the customer must take positive action to acknowledge acceptance of that (i.e. by ticking a box). It doesn’t appear that Apple has introduced any means for its customers to give this acknowledgement before starting a download.
Those in the app development and entertainment industries are understandably concerned about Apple’s move. Including the cancellation right in the terms, but not taking the steps necessary for the exception to apply, potentially enables customers to download and complete games and films, or download and copy music, and then contact Apple for a full refund.
It isn’t clear whether Apple plan to introduce a method for customers to waive their cancellation right.
What Others Do
Other major app stores, such as Google Play and Amazon’s AppStore, do not appear to refer to the 14-day cancellation right at all. This is risky as, under the regulations, failing to inform the customer of their cancellation right results in an extension of the cancellation period of up to 12 months.
Our Tips
If your business provides digital content, your terms of use should inform the consumer that they have the right to cancel and provide details of how they can exercise it. However, you can take advantage of the exception and avoid the need to accept cancellations in practice by making it clear to customers that, if they download or stream the content within the 14 days, they will lose the right to cancel, and having them acknowledge that.
The easiest way to do this is by having a tick-box acknowledgement as part of the checkout process, or prior to download, which is mandatory in order for the consumer to proceed with the transaction.
Further Queries
If you have any queries regarding consumer cancellation rights, or any other aspect of consumer law, please do not hesitate to contact our commercial team on 0845 241 9500.
Status of this Update
This post does not constitute any definitive or complete statement of the law on any subject. Roxburgh Milkins Limited does not accept any liability or responsibility for action taken as a result of information provided by us. You should take specific advice when dealing with specific situations, this post is general and educational in its nature. Nothing in this post creates any solicitor-client relationship or provides any legal representation or advice whatsoever by Roxburgh Milkins Limited.