Chris Barton: Is Apple becoming an evil empire?

Everyone knows they should read the terms and conditions for any product or service before they buy. Most of us know the adage "caveat emptor" - "let the buyer beware" - and yet most of us don't give the terms and conditions attached to software and digital services and products a second thought. We blithely click "I agree" and accept god knows what.

But there are some who do take the time and, in doing so, remind us of the tangled web we weave in our daily interactions with American multi-national corporations. The following is a cautionary tale from Brian Fairchild, who decided to buy an Apple iPad for $719 from the Warehouse at last year's Boxing Day sales.

Brian was looking forward to his first Apple experience and had intended to switch over from the PC world to Apple products for his home office. But what happened since has put him off entirely. "I now just want to be rid of the hassles, unhelpfulness and straight out chicanery of dealing with the people of Apple world. It's not in my future any longer," he wrote in a recent email to one of the various helpdesk staff he's been dealing with.

Brian is not alone. Many are concerned that Apple's growing market power is turning it into an evil empire. Depending on how you read them, Apple's terms and conditions can indeed sound sinister as Richard Dreyfuss ably demonstrates. But as Apple fans know, Apple products work better and are prettier than the rest, and the terms and conditions, whether they sign over your soul or not, are the price one pays to be cool.

Brian's problems began when he took his iPad home and went online to activate the device. Essentially that's how it is with iPads and other Apple products - to use the thing you first need to create an account with iTunes, a process that involves providing a valid credit card number which, once verified, permits the equipment to function. So far so good. Brian read the terms and conditions which comprised two documents, one relating to iTunes and the other to the iPad. In all a total of some 75 pages in 6.5 or 8 point text. But Brian was happy enough and clicked "Agree".

Initially, things went well and Brian enjoyed his new iPad, but around April he noticed application updates were starting to mount up. That's when he found that Apple had issued new iTunes terms and conditions which he duly read.

The change he objected to was that Apple now wanted to automatically start debiting his credit card for downloaded items such as magazines that seem to be free, but turn out to be free only for a trial period. Brian didn't want to agree to that. He thought it was a sneaky way to get the unsuspecting to pay up for a subscription without realising it and put far too much burden on the user to cancel the subscription. In his view the terms and conditions didn't meet New Zealand's consumer law requirements for openness and honesty. It certainly didn't give the user time to correct making a genuine mistake in downloading an app or service by accident.

Not that Brian himself had been caught out as he's a careful user. But he had downloaded free apps and magazine samples. He was also happy to pay for an app that he actually wanted and had agreed to purchase from the outset. Brian guesses Apple has changed the terms and conditions to avoid incurring the cost of the credit card disputes that must inevitably arise when people's statements arrive with Apple purchases on them - items such as magazines or games that they had thought were free but turn out to be a regular term subscription until cancelled.

To cut a long story short, Brian didn't agree to the new terms - because he disagreed in principle about allowing his credit card to be automatically debited in this way. It wasn't long before various applications on his iPad stopped working and soon, when the operating system had an update, it stopped working all together. Brian couldn't get the updates because he hadn't agreed to the terms and conditions.

In other words an impasse. Sample dialogue:

Apple helpdesk person: "I don´t think we are bullying you into accepting the terms, but without accepting the terms you can´t use the service."

Brian: "Basically you have withdrawn service until I do accept the new terms. Now if that isn't bullying, you and I went to different schools!"

In Brian's view, Apple has made his iPad unfit for purpose by its insistence that he accepts the new terms, which he believes he has a legal right to decline without loss of service. "I was happy with the terms at the outset and prepared to continue on that basis," he says. "If the item is unfit for purpose, I believe I'm entitled to a full refund."

So why not take it back to the Warehouse where he purchased it? Brian says the Warehouse hasn't done anything wrong. His beef is with Apple and its terms and conditions, which he feels he's being bullied into accepting. He wants to take the issue to the Disputes Tribunal so someone independent can sort out just what are his legal rights here.

Herein lies another problem. To take a claim to the Disputes Tribunal requires a physical address for servicing the papers. Apple is a registered company here but doesn't have offices, just a post office box for mail in Auckland - its nearest offices being in Sydney. Brian has repeatedly asked Apple for a physical address - such as the company's legal firm in New Zealand - but so far the company is refusing to give him that information.

There has also been lengthy correspondence with various Apple helpdesk persons - on one occasion with Apple insisting Brian had made purchases from iTunes but hadn't paid for them. Apple has since admitted that's not the case. Brian has also provided detailed information about what apps he used, pointing out that for a while he had used the free Angry Birds game - until he read the terms and conditions and promptly deleted the game. "I didn't agree with the fact that they could access my location and identify who I am calling." This particular aspect of Apple's terms and conditions was mercilessly parodied in a Southpark episode called the HumancentiPad.

Quite where this all ends up for Brian remains to be seen, but Apple might do well to realise Brian is not the sort of person who gives up easily and that he has had some experience - and success - in taking large companies to the Disputes Tribunal.

He also raises an interesting legal point. If you buy a product in good faith and accept the software terms and conditions in good faith also, does Apple have the right to unilaterally cause the product to stop working?

As Brian sees it, New Zealand consumers are reasonably well protected by New Zealand laws, but little is done to teach international sellers what their responsibilities are under these laws and they are continually flouted. So he's doing his bit in the hope that they'll learn. Bravo.