Clinton Maynard:
You might be one of the many, many Australians who signs up to a subscription of some sort, or you buy something online only to find out there are a lot of associated costs down the track that you weren’t aware of. The federal government’s going to be introducing new laws next year. These have been unveiled today by the Assistant Competition Minister Andrew Leigh, and the Assistant Minister joins me on the program. Hello Andrew.
Andrew Leigh:
G’day Clinton, great to be with you.
Maynard:
Good raising this one. I know this will be an issue before parliament next year. What are you trying to achieve through these laws?
Leigh:
Well, subscriptions can be a good thing but not being able to get out of them can be a pretty bad thing. And right now, many Australians are finding it frustrating to cancel online subscriptions. Sometimes you’ll be able to sign up with a couple of clicks, but then they tell you to pick up the phone to cancel, or else they’ll tell you that you have to pay all your back payments before you can cancel a subscription, potentially throwing people into debt.
We’re cracking down on drip pricing too which is where you go to buy something and then right at the end, you discover there’s some mandatory handling fee that you weren’t told about up front. We’re making things fairer for consumers and better for decent competitors.
Maynard:
So with the subscriptions – does the way it works at the moment, I would assume there is something in the fine print that maybe a lot of us don’t read. Something in the fine print that would alert you to these ongoing costs?
Leigh:
Yeah, there might be something in the fine print, or else, sometimes they’re just relying on inattention, on the fact that many of us live busy lives. We don’t have hours to spend on cancelling subscriptions. I’ve even heard of stories where people have cancelled a credit card because it was easier than trying to battle their way out of a subscription they didn’t want.
Maynard:
Yes, yes. I mean, there are also issues the way scams watch and scams work, and that can infiltrate that area as well?
Leigh:
That’s right. And there’s existing laws that take care of some of this, that deal with scam and deal with some of these sort of really egregious practices. But often they’re just sort of relying on putting a whole lot of extra friction into the system. Companies are automatically renewing you where you hadn’t expected to be auto renewed or telling you that you’ve got to cancel through painfully onerous processes. Over in the US, there’s been a case brought by their competition regulator that’s seen one and a half billion dollars paid back by Amazon for engaging in subscription trap behaviour. We don’t want it to go that far in Australia, we just want to see the firms do the right thing.
Maynard:
So, you mentioned auto renewal. I think that is something that catches a lot of people out. Would the laws make it a requirement for the retailer or the service provider to make clearer whether auto renewal is part of the system?
Leigh:
Yeah, you’ll have to tell people if you’ve got auto renewal. You won’t be able to just hide that in fine print and pretend that someone’s getting a free trial only then to discover they’ve been rolled over into an expensive annual subscription. All of this is about making sure that firms, whether online firms or gyms or movie cinemas, are doing the right thing by consumers. Our competition authorities tell us right now that they’ve got good tools but it would be better still if they had tools to deal with these unfair trading practices.
Maynard:
Just lastly Andrew, and I appreciate your time. Is it doable when so many of these services are most likely coming from overseas? Do you have any power when it’s out of the jurisdiction of Australian Government?
Leigh:
Just because you’re a foreign firm doesn’t mean you don’t have to abide by Australian law if you’re selling products to Australian consumers. So those foreign firms are required to do the right thing. Some of them have been a bit problematic – I mentioned Amazon before. Some have actually been pretty good. So, Apple sends you a monthly email with each subscription and has a one stop shop for cancellation. So we’re expecting those foreign firms, as well as Australian ones, to do the right thing when these new laws come in.
Maynard:
A good step in the right direction. Thank you Andrew.
Leigh:
Thanks so much for the chat.
Maynard:
The Assistant Competition Minister Andrew Leigh.