Service contracts needed to protect mobile app users

Establishing service level agreements will protect consumers against underperforming apps, analysts say, but note users still "on their own" since such contracts are offered mainly for business apps.
Written by Tyler Thia, Contributor

With the app ecosystem experiencing an exponential growth, experts agree that service level agreements (SLAs) for mobile app purchases will give consumers more protection against faulty or underperforming apps. However, today, these are provided mainly for enterprise applications and consumers need to realize that the onus is still on them to protect their own interests, note industry watchers.

Craig Skinner, senior consultant at Ovum, told ZDNet Asia in an e-mail interview, that from a legal perspective, mobile apps should be accompanied by their own terms of service or license agreement, or otherwise, be covered under an umbrella agreement provided by the app store owner.

Shalini Verma, Gartner's principal analyst for consumer services and applications, noted that most consumer app stores currently require users to agree to a "terms of service" that typically includes a disclaimer which does not guarantee uninterrupted service.

"Most consumers would love to have a SLA from the service provider or the application developer, but in reality SLAs are largely used for enterprise mobile applications," Verma said in an e-mail.

Skinner noted that for mobile apps that require recurring payments, customers will expect to know what they are paying for. However, he was quick to point out that in reality, consumers seldom pay attention to these details and the lack of service is unlikely to deter them from purchasing apps.

Verma said SLAs between providers and developers will provide better "protection" for consumers, for example, by facilitating refunds when necessary.

Skinner suggested that app providers should establish an interstitial agreement such as those provided by software companies, which include disclaimers and limitations of liability in license agreements to protect app providers. He added that such agreement would have to be viewed and accepted by consumers before they can purchase or use the application.

Noting that the agreement should be clearly highlighted to the consumer, Skinner said: "Having the agreement embedded or hidden in the app or on a Web site, which the customer is not required to view, could mean that the customer has not understood and accepted the agreement even though they are using the mobile app."

Lack of billing relationship, lesser liability
Verma noted that due to the billing structure of app purchases, consumers have a direct relationship with the app store owner or their mobile service provider, so developers are somewhat "protected" in terms of liability. He added, though, that app developers usually have refund or claims policies for consumers "who have a legitimate cause for dissatisfaction".

However, he noted that if consumers purchased faulty apps offered by lesser-known developers, they could potentially face problems with app developers that are non-responsive in the event of disputes.

Asked who should be held responsible for ensuring apps are safe for downloads, Skinner said: "From a legal perspective, it is mostly a case of buyer beware."

However, he noted that with competition brewing between mobile platform and app store owners such as the Apple App Store and Google Market, market players would want to maintain to a high level of "quality filtering" to meet customer demand for stable apps.

"A sustained difference in the quality of apps coming through on one platform versus others will influence customer buying trends," he said.

Apps laced with malware had previously infected users, the Ovum analyst said, noting that app stores that lack stringent checks would put their users at risk. He added that any security mishap could affect the app store owner's reputation and user demand for products running on its platform will suffer.

According to Android Market's Terms and Conditions, Google expressively limits its liability of apps purchased. Under clause 10.0, it stated: "Google and its subsidiaries and affiliates shall not be liable to you under any theory of liability...for any direct, indirect...or exemplary damages that may be incurred."

Terms and conditions outlined on Apple iTunes, which supports the App Store, also stated: "In no case shall Apple, its directors, officers be liable for any direct, indirect...damages arising from your use of any of the service."

Skinner and Verma concurred that consumer associations have a role to play in the event of a business failure, for example, when a major app provider goes out of business, leaving consumers in the lurch.

However, in the event of non-performing or faulty apps, the telcos can step in to provide service recovery and, perhaps, stop the sale of the developer's apps, Skinner said.

Apple iPhone user, Joanne Goh, pointed to price and reviews as important factors in her decision to download apps. Goh told ZDNet Asia she has not experienced any problems with her apps, but said the establishment of SLAs would benefit the mobile apps ecosystem in the long run.

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