Previously free service implements a subscription

Services
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A purely hypothetical situation - what if a free to use service (presumably in operation through ad revenue, corporate sponsorship, etc) later decides to implement a subscription service, blocking access to those who refuse to agree (or are unable) to this cost?

Follow up question - what if there had been a sunken cost, and would this change the outcome? Perhaps a practical hypothetical would be that of a free-to-play video game with in-game purchases, then implements a subscription - would one be out of luck for all of the purchases they had previously made?

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Welcome @levon.

You have posed an interesting question.

My initial thought on your first paragraph is that the site has the right to charge if they so choose.

Now the second paragraph is trickier.

As is often the case the Terms & Conditions (T&Cs) you hypothetically had to agree to play probably gives them complete discretion to do what, when, & how they want (short of demanding possession of your first born). And if you wish to take legal action, it would have to be in the American jurisdiction under the state laws of … (fill in the gap). [By the way, you possibly have just signed away access to all your personal data which they can also pass on to third parties if they feel like it.]

In general, I would hope/think that they should allow you access to that point in the game at which your payments took you. Access thereafter would require payment.

The reality is unless a widespread social media upheaval occurs over the shift to a ‘pay for’ model, there is not much likely hood of being players beig able to recover the cost of purchases if they do block access unless players pay.

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Welcome to the Choice Community Forum Levon :slight_smile:

That’s what happened with the online version of the newspapers in the Fairfax group, and I’m sure it has happened for the Murdoch ones as well, so it isn’t hypothetical!

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Thank you, both!

Is this so? It was my understanding that Australian citizens were covered under ACL whenever sold to, regardless of whether the corporation is based in another country or not, although I could be wrong (of course, this isn’t taking into account the practical limitations of following up on such legalities!)

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I think @meltam was being satirical. Most of the T&C have such clauses regardless of whether legal or enforceable in any particular jurisdiction. You might remember some of the classic Dilbert’s about T&C.

Not citizens per se, those ‘buying here’. For completeness an Australian citizen is covered by whatever laws are applicable in the jurisdiction the purchase is made from. If a purchase was made while in the US those T&C designating laws under Delaware, California, or whatever state would be applicable, same for being in the EU, etc.

Therein lies the problem. If they do not respond favourably there is often no practical remedy.

If you purchased features inside a game per your illustration, and the game subsequently became subscription walled you could ask for a refund or a perpetual license to use the game. If they refuse you would not have much leverage unless it affected quite a few of us and the ACCC stepped in. At that point, if it is a small company their solution could be to firewall Australia if it was small change to them, or review their subscription model if Australians provided significant revenue. Good customer service and companies that survive would often pick the latter hoping for more in-game purchases, and some subscriptions games purchased in future, to keep good will.

When something is general, hypothetical, or for a ‘friend’ it leaves enough to the imagination.If you cite the T&C you ‘signed on to’ we might be able to give better commentary.

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@Levon As @PhilT pointed out correctly I was very much tongue in cheek about the Ts&Cs. Have a look; they often have onerous clauses in them.

Seriously now. Yes you would hypothetically be covered by the ACL in your hypothetical situation IF you paid for it here in Australia. BUT the problems are:

  1. You would have to be able to find someone in authority in the business to communicate with. Often they lack direct contact information.
  2. If you did find a point of contact & wrote to them, and pointed out your rights under the ACL, online businesses often don’t reply, so they are likely to ignore your entreaties.
  3. On a practical day to day basis there is no enforcement of the ACL by any government authority so don’t expect any meaningful support from any of them. Fair Trading or Consumer Affairs in your state/territory MAY write on your behalf if it’s an Australian business but they don’t enforce either. Also, they expect you to provide them with your attempts to sort out the issue before they will proceed. (I’m not sure if they could/would help if the business is o/s?)
  4. The next option is social media pressure. Businesses may respond to you if you put adverse comments on their pages such as Facebook, Instagram, etc.
  5. If the matter is serious enough to pursue after being ignored on the previous options, the only recourse is legal action.

As mentioned above, as this is a ’hypothetical’ scenario it is difficult to give more than general answers.

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I think that the reasonable person test would come in. For example, if one paid for in software purchases and the software was marketed and provided free, and the next day the same software became subscription based that all users had to not pay, one could argue that the in software purchases would hot have been made if one knew that the software was becoming subscription based shortly therafter. In such case, one could request a refund.

If one had been using the free software for many years and made in software purchases say months or years before the change in subscription arrangements, then one would argue that the consumer has potentially had value in relation to these in software purchases and a refund is less likely to be seen as reasonable.

It is also worth noting that some apps/software is free initially and then at a later date due to its popularity, become a one-off initial payment app/software. Usually is one has registered before tbe app/software becomes a paid service, the software can continue to be used free of charge.

As outlined above, it is also worth reading T&Cs associated with software/apps in relation to any changes, including payments. It is also worth noting that the T&Cs also need to be reasonable and fair.

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In complete honesty, it was entirely as a thought experiment. A ‘what would I do if this happened to X or Y or Z thing I use…’ sort of scenario, I suppose. Thank you for your responses both, though, they were and are deeply insightful :slight_smile:

On that note, anyone may of course feel free to provide a more tangible scenario (that they have experienced, perhaps!) to discuss, and I’m sure it would be seen not as derailing a thread, but providing a more concrete angle to approach this from!

This is an interesting point raised, of drawing a particular ‘value’ from a purchase. On the other hand, if a service is still selling that same item to other customers (and, using the hypothetical of a video game above, this means that the product is digital and obviously still works), would one not still have ‘value’ to draw under the pretences of the good lasting a ‘reasonable time’?

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A reasonable time and value would be based on the monies spent and the reward given. If say a few dollars was spent in a game to do something…and the game because subscription or paid for a few months later, one could possibly say that a reasonable time has occurred.

If one has paid say a few hundred or maybe thousands or more say for a design module for an free personally used CAD program, one could argue that a reasonable time should be more than a few months…maybe a year or two? For commercial/business use, the month or two may seen to be reasonable.

Looking at the competing paid software in the market place may also give an idea of potential value. If these have in app/software purchases which say have annual paid subscription similar to the app/software one has and its status has changed, one could argue that if one has had the in app/software purchase for the same or more time, the value has been potentially reached.

It wouldn’t be a simple exercise to determine what a reasonable time is, but the price paid and competition should provide some basis to the value of the purchases.

Also, the company could possibly argue the provision of the ‘free’ software/app has an intrinsic value…and if a consumer uses it for free, then the company has provided value to the customer free (even though the customer was subject to in app/software advertising). This could be used to avoid paying a refund for in app/software purchases in cases where the software/app use has been enjoyed free for a period of time.

As outlined above, it would however be difficult to argue that if one bought in app/software purchases one day in good faith, only to find out unexpectedly shortly thereafter (a day. week later…) that the in app/software purchases couldn’t be enjoyed due to the app/software becoming a paid service, then a refund should possibly occur…however…

Another point I forgot to mention in my earlier post in relation to refunds is that most software/apps are developed and available from non-Australian based (or foreign) sources. If one is sourcing or purchasing content from a foreign entity located overseas without any operations in Australia, the provisions of the Australian Consumer Law don’t apply. The local consumer at the location of purchase would apply.

If the software is obtained say from Google Play or the Apple Store, then there may be possible to seek refunds (if they can be justifiable and substantiated) from these platforms as they have Australian based operations and also many purchases in software/app are made using gift cards or credit cards linked to Apple/Google accounts. In effect, these platforms are the Australian retailers, while the software/app developer is a foreign entity.

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Just a point about jurisdiction, you might sign a T&C re mediation/legal action in some far off corner of the USA (or EU etc) but in the case of Valve ACCC took them to Court here re their terms and won that case. I think as an individual it would be extremely costly to fight for those rights but if enough complaints were generated then the ACCC might (and only just might) get involved.

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As a hypothetical, perhaps the value is as a caution to others , and of the increasingly online digital future. A more concrete answer may not be assured with a real example or even a hundred different real examples.

The majority of the online businesses Australians are most likely to be dealing with are more than OS based. They choose the location of the businesses and as needs write and rewrite their T&C’s.

As the discussion suggests there are substantial issues, some might say risks with pursuing recourse in the hypothetical you raised.

That for me says it all.

Create sufficient Australian traction (including political momentum) and there may be some action taken. If the cause of the problem is a small OS business it might seem an easy target, but at the same time it might have too few Australian customers to gain support where it matters.

Alternately it may be a really big player with many Australians harmed, or at risk. In the way of the world, whose pockets are deepest! Valve may have lost to the ACCC. Others with a broader market such as Google or Facebook are unlikely to be as soft or cheap a target. The former no doubt is also not beyond lobbying politically, given its significant interests in drone delivery and vehicle guidance products. Both need the regulatory hand of government on board. Which way would the parties swing? Political principles or opportunity!

For now I assume any digitally delivered service is only assured for as long as I am connected to it or logged on. That’s not a hypothetical.

Perhaps it is best to risk as little as necessary, save in open or alternate formats, and accept that what has been invested will likely take much more time and cost to pursue (outcome uncertain) than having put alternate strategies in place.

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I despise the current trend of software as a service. All of the points raised here, by yourself and others, further goes to show how sinister it may be for the consumer.

Perhaps there is need for stronger legislation in this area?

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Also for some services that are pay per use or subscription there are alternatives that are either free to use or single payment still.

For Office there are a few alternatives, some that come with privacy strings attached but not all do. An example of free to own & use is LibreOffice as is OpenOffice

For image manipulation there is GIMP, Paint(dot)NET and others

For music and Video play there are many including VLC, MusicBee (which is also a library manager of your music), GOM, Foobar2000, and Winamp

For a music editor you can try Audacity

For Zip, RAR etc archive control you could use 7-Zip

For password management try KeePass 2

For uninstalling programs try Revo (free version)

I dislike having subscription only myself and try to avoid it’s use where it is possible. However many things we desire these days are also subscription due to the nature of the use we make of them eg movie streaming, music streaming (these two in particular are about paying the artists and companies that produce the material fair recompense). You of course can buy the physical media and put it in your library without having to then pay an ongoing subscription.

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