South Korea's Fair Trade Commission (FTC) has ordered Google and Apple to remove specific clauses pertaining to refunds in the terms and services of applications on Google's Play Store and Apple's App Store. The watchdog deemed the clauses explicitly unfair and responsible for damages to the consumer.
On the Play Store, all Android apps have had their non-refundable clauses removed, with developers now required to develop refund policies. Apps that automatically charged consumers at the end of a free trial period will no longer be allowed to use the label "free trial."
Instead, they will be labeled as paid apps that offer free services for a limited time, at which point the consumer can decide to cancel their subscription. Consumers who download faulty apps will also be able to recover damages beyond the purchase price of the app.
On the App Store, developers must notify customers of any modified terms and conditions beforehand and give the option to cancel and receive a refund should they not agree with the new terms. In-app purchases can also be fully recoverable.
The FTC is hoping that this change in policy will serve as an example for other countries around the world and promote fair practice.
Hwang Won-chul, the head of the Korean FTC's adhesion contract division, told the Korea Herald, "Google will limit its response to the Korea, while Apple is considering applying the revised contract terms globally."
The new policy does not only affect developers. Should the consumer violate the apps' terms and conditions, they are responsible for any damages, according to the ruling. The violation must clearly be stated and evident, and the damages claimed by the developer must be causally relevant to the violation made by the customer, the FTC ruling says.
Also, whereas before developer employees were exempt from any blame, if there are reasons attributable to employees, they can now be responsible for damages, whether negligent or not.
In March, Korea's FTC pushed through similar corrective measures for app marketplaces belonging to domestic carriers SK Telecom, KT and LG Uplus.