15-minute refund period of Google, Apple apps irk consumers

15-minute refund period of Google, Apple apps irk consumers. December. 19, 2011 01:39. weappon@donga.com.

A 27-year-old smartphone user never paid for an app until two months ago. She purchased a recorder app from Android Market, an online app store run by Google, for 2,000 won (1.73 U.S. dollars) and asked for a refund due to a malfunction.

Her request was rejected, however. According to the customer terms and conditions of the store, a product is non-refundable unless the purchase is canceled within 15 minutes of the purchase, Google said.

"It takes more than 15 minutes to check the operation of the downloaded app," the user said, adding, "Many applications don`t work properly in certain smartphone models, but the refund conditions are too complicated. This prevents me from buying paid apps."

As such, online app stores by Google and Apple are under fire for failure to comply with regulations protecting domestic consumers, namely refunds.

Google and Apple, however, say apps are not subject to Korean laws because they are supplied by their headquarters overseas. Against this backdrop, the Fair Trade Commission in Seoul is at a loss over taking action for fear of a backlash from the two IT giants.

According to the fair trade watchdog, if an app purchased via a mobile app store does not work properly, a customer can get a refund within three months after purchase or within 30 days after detection of the malfunction under domestic e-commerce law. Korean mobile app stores such as T Store of SK Telecom, Olleh Market of KT and OZ Store of LG U+ comply with this regulation.

Android Market, however, gives a refund only if the sale is canceled within 15 minutes. This is a universal regulation, and after 15 minutes, a customer should contact the app`s developer for a refund, said Google.

Considering that the majority of apps are developed overseas and domestic developers are small companies, getting a refund after 15 minutes from purchases is virtually impossible.

On the other hand, Apple, the operator of App Store, says consumers can get a refund upon request within two weeks after purchase though the refund deadline is not stipulated in its terms and conditions. Two weeks, however, are still shorter than the refund period set by Korean law.

The problem is a lack of means to crack down on breaches of domestic law by Google and Apple, who jointly control 84.7 percent of the domestic mobile app market.

Extraterritoriality is applied to Android Market and App Store as they are operated by their headquarters in the U.S. Both companies have branches in Korea but they have nothing to do with mobile app store services, saying this is why Korean e-commerce law does not apply to Android Market and App Store.

The Fair Trade Commission seeks to make Google and Apple comply with Korean law.

Experts warn, however, that restrictions on them will incite a backlash and victimize Korean consumers. When Taiwan ordered Google in June to lengthen the refund period from 15 minutes to seven days and imposed fines for non-compliance, Google resisted the order by suspending the sale of pay apps.

A source from the Fair Trade Commission said, "Though the European Union has recently set the refund period for pay applications at 14 days, Google has yet to take any action," adding, "As each country is rearranging related regulations, we need to watch international trends for the time being."