Consumers will be invited to name and shame dodgy mobile apps as part of a new inquiry by the Commonwealth Government's Consumer Affairs Advisory Council (CCAAC), said Assistant Treasurer David Bradbury.
CCAAC will look at the current app markets in Australia, the adequacy of information disclosed to consumers about the costs associated when downloading and using digital content, including apps, and actions that can be taken by consumers, industry and governments to help improve consumer experiences.
"In a very short period of time, new mobile devices like smartphones and tablets have changed the way consumers engage in commerce," said Mr Bradbury.
"The pace of this technological innovation is driving entrepreneurs to use these new devices to come up with more and better ways to sell their wares to consumers.
"At the same time though, some consumers have raised concerns about aspects of mobile commerce, particularly where purchases can be made without much difficulty using stored credit card data.
"More and more people are downloading digital content like books, music, magazines and movies directly to their devices, while 'apps' are being used as virtual shopfronts to acquire goods and services.
"Apps are also increasingly relying on 'in-app' purchases and subscriptions, particularly common in games that may be played by children.
"Some of these apps are causing consumers great frustration and cost, and this inquiry will help to name and shame some of the worst offenders.
"We have strong consumer laws in Australia that protect the rights of consumers and place clear obligations on businesses. This inquiry is an opportunity to look at the adequacy of existing measures to address any consumer concern, including the legal protections available to consumers and the efforts of industry to improve the way they do business with their customers.
"I encourage all Australian consumers and businesses engaged in m-commerce to have their say and tell the inquiry about their experiences with the rapidly-changing nature of online business."
The Terms of Reference for the inquiry can be found on the new CCAAC website, www.ccaac.gov.au. An issues paper will be issued shortly and people will be able to make submissions to the inquiry via the website. The inquiry will be open for consultation until 31 January 2013.
Attachment
'App purchases by Australian consumers on mobile and handheld devices'
Terms of Reference
Technology is evolving at a rapid pace opening new markets and creating new opportunities for consumers. Consequently, online markets associated with mobile and handheld devices are expanding. These markets allow consumers to purchase digital content (or applications, 'apps') such as music, movies, magazines, software programs and games. There are various options for downloading and using this content through the most popular 'ecosystems' and may also feature ongoing subscription-based and ad-hoc 'in-app' purchases beyond the initial free or paid download.
I request the Commonwealth Consumer Affairs Advisory Council (CCAAC) to conduct an inquiry into the experiences of Australian consumers with downloading apps, including free and paid apps, and making in-app purchases, on mobile and handheld devices.
Under its terms of reference, CCAAC will examine the following matters as part of its inquiry:
- the characteristics, features and trends of app markets in Australia;
- consumer experiences when downloading and using such content, including when used by children;
- adequacy of the information being disclosed to consumers about the costs associated when downloading and using this content before and after it is downloaded;
- adequacy of existing measures to address any consumer concern, including the legal protections available to consumers, the adequacy of default settings to ensure consumers are making an active decision before incurring additional charges, the availability and ease of use of 'opt out' features, the adequacy of existing parental controls for app stores and how these controls are promoted to consumers, and any other industry initiatives; and
- actions that can be taken by consumers, industry and governments to help improve consumer experiences when making in-app purchases, including international approaches.