Apple announced a new iPhone 3G S on Monday, which created a problem for people who already had an iPhone 3G but who really need the new features, or whose lives are hopelessly incomplete unless they can flash the latest shiny shiny gadget. Well, it was O2’s fault, really. The phone company decided that people who wanted to upgrade would have to buy out their existing contract. In other words, it was offering “business as usual” rather than doing them a special deal.

Steve Alder, general manager of devices for O2 UK, told TechRadar:

“Having subsidised much (or all — depending on tariff) of the price of a customer’s iPhone 3G, we simply cannot justify invalidating that contract and subsidise a second device for the same customer.
“Much as we understand the desire of many customers to have the latest version, this would be a loss making deal for O2 and would be a distinct set of business terms for iPhone customers that don’t apply to our other customers.”

In fact, O2 did do a cut-price deal for iPhone users when the iPhone 3G came out, and it will do an iPhone 3G upgrade on its usual terms. The problem is that O2’s early upgrade programme is only for people who are 6 months or less from the end of their contracts.

The obvious solution, of course, is for O2 to offer iPhones on an annual contract basis, based on the assumption that Apple is going to introduce a new model every year. At the moment, for some buyers, the contract is longer than the useful life of the iPhone.

Some Twitter users (eg me) have seen rather a lot of pleas to sign an online petition or Twitition (how twee!) that says “we the undersigned petition O2 to offer reasonable iPhone 3GS upgrade and tethering #o2fail”. It has 3,902 signatures at the time of writing.

There’s a parallel petition that says: “we the undersigned petition AT&T to offer reasonable iPhone 3GS upgrade prices” with 3,999 signatures. Or twignatures.

But as the LA Times says: “In the name of fairness, it should be noted that this movement comprises a vanishingly small fraction of iPhone 3G owners. The company has sold more than 15 million of the second-generation devices since their release last summer.”

My own view, expressed here several times since 2003, is that it should be illegal to subsidise handset sales, as it is in South Korea. The mobile phone market would be a lot healthier if people knew how much heir handsets cost, and bought what they were willing to pay for, and if phone networks had to compete on the price of minutes and the quality of their service. The current system distorts competition in both areas.

The world’s two leading antivirus companies have been fined for automatically charging customers to renew their subscriptions.

McAfee and Symantec, which make the computer industry’s most popular virus protection software, each agreed to pay $375,000 (£230,000) in fines and costs after a complaint was brought by the New York Attorney General’s office.

The case came after customers complained that both companies had not been clear that anyone signing up to use their products would automatically be charged to renew their subscription every 12 months. This, said New York attorney general Andrew Cuomo, constituted an unfair attempt to separate customers from their money.

“Companies cannot play hide the ball when it comes to the fees consumers are being charged,” he said in a statement.

“Consumers have a right to know what they are paying, especially when they are unwittingly agreeing to renewal fees that will not appear on their credit card bill for months. Symantec and McAfee – two of the nation’s largest vendors of computer security software – will now have to be clear and up-front with their customers when it comes to renewal fees.”

The two Californian companies dominate the market for virus protection with products including McAfee VirusScan and Norton Antivirus McAfee, and between them are worth more than $20bn.

Automatically renewing subscriptions has become standard practice in the antivirus industries in recent years, with companies saying it is vital to protect consumers and prevent potential viruses and malicious software from being downloaded to their computers.

The investigation by Cuomo’s office, however, found that the information on renewal fees was hidden in the small print of the subscription agreement, and that both companies made it difficult for customers to opt out or request refunds if they did not want to keep the service. They have now agreed to make it more obvious that subscriptions will be automatically renewed, and to offer refunds to any customer who requests to cancel their service within 60 days of being charged.