SINGAPORE: There is no legal loophole or business regulation that needs to be reviewed when it comes to companies getting overseas entities to be in charge of their apps - oftentimes the primary mode of interaction with customers in terms of collecting user and payment details, lawyers told Channel NewsAsia.
Such a business arrangement was brought into the spotlight over the weekend when FTI Consulting, the provisional liquidators for bike-sharing company oBike, shared that the latter’s mobile app is not under the control of oBike Singapore – the entity currently going through the liquidation process.
AdvertisementDrew & Napier director Lim Chong Kin said in his email that there is no general prohibition against providing on-demand services that collect deposits as well as user and payment data via an app that is not owned or controlled by a Singapore-registered entity.
That said, Mr Lim pointed out that such apps continue to be subject to the laws in place, such as consumer protection laws and the Personal Data Protection Act, where applicable. The laws vary depending on the nature and functions of the app in question.
“Whilst it would be tempting to view this as a loophole to be closed, I would view this more as a balance that needs to be constantly recalibrated in light of the societal concerns at stake,” said the lawyer.
Another lawyer, Mr Bryan Tan, concurred saying that companies are free to make arrangements for how deposits are collected, provided it is clear to the consumer.
AdvertisementAdvertisementSingapore law still applies to non-Singapore entities as they are dealing with data from consumers here, “although it would be more difficult to chase a non-Singapore entity”, the Pinsent Masons partner added.
FTI Consulting had told Channel NewsAsia over the weekend that the app is owned by and under the control of a separate overseas entity within the oBike Group, which the provisional liquidators have no control over or rights in relation to the operation of the app.
“As such, the provisional liquidators are presently unable to process any refunds (if any), through the app,” it said.
Consumers in Singapore had asked why the bike-sharing company cannot refund the deposits collected via the oBike mobile app, similar to what another service provider Mobike did.
As for whether similar situations currently seen with oBike may happen with other on-demand services that exit the local market, Mr Lim said this really depends on the terms and conditions of that company, its organisational structure and internal arrangements with regards to user deposits.
“The foreign ownership of the app is unlikely to be determinative,” he said.
With the Land Transport Authority (LTA) currently studying the need for bicycle-sharing operators to place a security deposit or performance bond should they require consumers to place deposits, this may also help avert to some extent a similar messy market exit, the Drew & Napier lawyer said.
“In such a case, users of such apps can be assured of the return of at least a part of, if not all, their deposit monies,” Mr Lim said.
He also cautioned consumers here to take steps to safeguard their own interests. For instance, it is a good practice to read the terms and conditions before signing up for such apps and consenting to their data collection.
Users should also be mindful of whom they disclose their personal data and payment details to given their importance, and these should be disclosed only to trusted parties, the lawyer added.
“Ultimately, it has to be caveat emptor – let the buyer beware.”
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