Apple Gives You Your Money Back If You Don’t Like the Music!

Johnny Borrell 12 Jun 13 Sometimes you realise that the digital world is still very young, and to some extent we’re still working out how to live with it, and how to manage it from a commercial and business point of view. A couple of stories over the recent holiday period confirmed that confusion.

One was around the new VAT regulations for digital products, which is confusing lots of small firms in the UK certainly. “From 1 January 2015, businesses supplying broadcasting, telecommunications and e-services (digital services) to consumers will be required to account for VAT where the consumers live or are located”. This is all about trying to make sure firms are not avoiding tax, but the complexity is causing a lot of pain in the process.

But the more fascinating report explained that new legislation means that Apple (and competitors, I assume) now have to offer a statutory right to consumers to “return” downloaded products bought on iTunes within 14 days of purchase if the buyer is not satisfied. A full refund is then payable by Apple. As the Guardian reported:

Accordingly, the iTunes terms and conditions have now been updated to include a “Right of cancellation”. The company tells users that “if you choose to cancel your order, you may do so within 14 days from when you received your receipt without giving any reason, except iTunes Gifts which cannot be refunded once you have redeemed the code.”

So if I download the new Decemberists album this month, then decide it is not quite as good as their brilliant The King Is Dead from 2011, I can “return” it to Apple. Except of course I can’t really physically return it. It is still sitting on my computer, and probably my iPod by then, and perhaps I will have burnt it onto a CD to play in the car too. Am I supposed to delete the download? Smash the CD?

But there is some confusion about exactly how this works. The EU legislation allows firms to make this exception (from the iTunes Ts and Cs): Exception to the right of cancellation: 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.

So if you have downloaded the track or album and listened to it (“delivery has started”) then in theory you cannot get a refund. But how would Apple know if I open it on my computer – or even copy the file and open elsewhere? And the Popjustice website who tried this got a refund, no questions asked. Popjustice also ask what this might do for the music charts – an unscrupulous record company could do thousands of downloads to get in the charts, then get a refund!

Are there any implications for business? The same applies to Apps as well as music. I guess downloading software (and using it) then “returning” it is morally pretty much the same as using pirated products, and may be illegal too, so it is probably not a good idea for business. But this does all highlight the complexities we are getting into around this new world of digital, how we protect IP in that world, how governments make tax revenues from these services, and similar issues.

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