Thursday, December 2, 2010

An Element of Unfairness: End User License Agreements


You Have Just Been Screwed...


Every time you want to use a piece of software, you follow a few basic steps. You probably look for the software, purchase or download the software, then install the software then use the software. Oh wait, you also probably spend a few hours doing research into the license agreement and making sure that your rights as a user are respected while using the product or service provided to you by the vendor. You don't?

If you don't read the Terms of Service or the End User License Agreement when you install software on your computer you're not alone, but you may also be at a disadvantage for doing so. In recent studies, users have been shown not to read user agreements. In one particular study, a researcher included a cash incentive for calling in at the end of a license document and no one called in until after over 3000 copies had been downloaded. Such a low proportion of users reading license agreements is worrying because it enables corporations to include surprising terms and bind the user legally to them.

Since attention was drawn to unfair license agreements earlier in the 2000's, Terms of Service agreements have made only limited improvements. Many companies still sport problematic, unfair, illegible or unclear terms, however, and with little to no form of recourse for users, corporations do not have much incentive to change their policies.  Outrageous stories about user agreements still continue in hopes of better protection for users.


Do I Really Have to Read That Thing?


Many people do not read end user license agreements.  They're long and dry and many users do not understand the terms and phrasing used.  Often they are presented in an unfriendly or intimidating way to discourage users from reading through them.  There are many reasons why someone would choose not to read the terms of service before installing a product.


Terms of use are often attached to software products that the user feels he or she needs, but terms are presented on a "take it or leave it" basis.  If software is needed, then there is no real power for the user to disagree, because you can't use the software unless you agree to the terms.  Companies with few or no competitors can write anything into their terms of service because no company will offer better terms.  Because of the perception of reading the agreement to be useless, many users do not read them.

Moreover, many users are under the impression that with so many end users corporations will either not notice if they deviate from the terms of service or that the company will not pursue them if they do notice.  With so many people using computers nowadays it is impossible to catch every single breach of user contracts, and it would be infeasible to spend the resources doing so.

Finally, most users are under the impression that there is no legal action they can take against companies because of the liability clauses that are in so many license agreements in software.  It is a misconception that all terms of service contain roughly the same content, but many people still believe it is true.


What is Wrong with Our License Agreements Right Now?


In a recent reading of some terms of service agreements from popular products accessible on the Internet, I came across some examples of the troublesome aspects of end user license agreements.  The largest problem is that corporations attempt to transfer all responsibility to the user for using their product.  If that sounds too theoretical for you, think of it this way: you go to buy a microwave oven for your family.  Once you've paid for it, brought it home, unwrapped it and set it up, you try to use it.  Instead of being able to use it, a box pops up where the numbers are with a service agreement saying that the company will not be responsible for anything that happens because of the microwave you just bought.  If it has a bug in it and fills your kitchen with radiation it is your problem for deciding to use it.  And the best part is that you can't return it because you opened the shrink wrap already which voids your ability to return the product to the store even if you don't accept the terms under which you could use the microwave.

Does that sound good?  I didn't think so.  Let me translate for you now some of the other examples of unfair content in terms of service contracts:

Microsoft Says:

"If you live in or your business is headquartered in North or South America, you're contracting with Microsoft Corp., One Microsoft Way, Redmond, WA 98052, USA, and Washington State law governs the interpretation of this contract and applies to claims for breach of it, regardless of conflict of laws principles. All other claims, including claims regarding consumer protection laws, unfair competition laws, and in tort, will be subject to the laws of your state of residence in the United States, or, if you live outside the United States, the laws of the country to which we direct your service. You and we irrevocably consent to the exclusive jurisdiction and venue of the state or federal courts in King County, Washington, USA, for all disputes arising out of or relating to this contract."


This basically states that you are not entitled to take legal action in your home country, state or city.  If you have a problem with them, you have to go to them.  They will not settle disputes anywhere but King County, Washington, USA or under any other law.  I hope you can afford plane tickets and hotel reservations...

Google Says:

"2.2 You can accept the Terms by:
(A) clicking to accept or agree to the Terms, where this option is made available to you by Google in the user interface for any Service; or
(B) by actually using the Services. In this case, you understand and agree that Google will treat your use of the Services as acceptance of the Terms from that point onwards.
2.3 You may not use the Services and may not accept the Terms if (a) you are not of legal age to form a binding contract with Google, or (b) you are a person barred from receiving the Services under the laws of the United States or other countries including the country in which you are resident or from which you use the Services."
 
If you use Google for anything you agree to a whole bunch of stuff that you are not informed of when you first see Google's homepage.  Section 2.3 states that if you are not of legal age to form a binding contract with Google than you are not allowed to use it.  Well here in Canada the legal age for creating a binding contract is 18...but I know a lot of people younger than that who use Google regularly.  Furthermore, the only people who actually read this are the people who are of legal age.  Many contracts share the problem of what constitutes as accepting an agreement. 

Foxit Reader says:

"LIMIT OF LIABILITY AND EXCLUSION OF INCIDENTAL, CONSEQUENTIAL AND CERTAIN OTHER DAMAGES.  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL FOXIT CORPORATION, ITS AUTHORIZED RESELLERS OR THEIR SUBSIDIARIES BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES WHATSOEVER (INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOSS OF PROFITS OR CONFIDENTIAL OR OTHER INFORMATION, FOR BUSINESS INTERRUPTION, FOR PERSONAL INJURY, FOR LOSS OF PRIVACY, FOR FAILURE TO MEET ANY DUTY INCLUDING OF GOOD FAITH OR OF REASONABLE CARE, FOR NEGLIGENCE, AND FOR ANY OTHER PECUNIARY OR OTHER LOSS WHATSOEVER) ARISING OUT OF OR IN ANY WAY RELATED TO THE USE OF OR INABILITY TO USE THE PRODUCT, THE PROVISION OF OR FAILURE TO PROVIDE SUPPORT SERVICES, OR OTHERWISE UNDER OR IN CONNECTION WITH ANY PROVISION OF THIS LICENSE, EVEN IN THE EVENT OF THE FAULT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, BREACH OF CONTRACT OR BREACH OF WARRANTY OF FOXIT CORPORATION, EVEN IF FOXIT CORPORATION HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES."

Basically, no matter how they screw up, they may not be held responsible.  If using your software kills you, it's your fault.  If they lose your personal information, shame on you for trusting them.  If their software causes you to lose profits, I guess you're out of luck.  Sadly, this clause is in just about every contract I've read.  No one is willing to take responsibility for their own work any more.  Personally, that gives me no confidence in the company - the fact that they are so unsure of the product's ability to meet consumer needs that they feel the need to explicitly waive themselves of the burden of reliability and dependability.

Skype says:

"7.1 In addition to this Agreement, You have to comply with the following Additional Terms when using the Skype Software, the Products and the Skype Website. We expect You to read these Additional Terms carefully, all of which are made part of this Agreement:
You are expected to read all of these documents as well.  In some cases additional documents may be referenced within referenced documents making a long chain of contracts that you are binding yourself to when you use a software product. Most people do not have the time or patience to hunt down every subsequent document that outlines how they are allowed to use their product.

Many problems exist beyond these examples.  Terms almost always give the provider an unfair advantage.  Terms of service may include the ability to modify terms at any time and without notification.  They may include mandatory access to your computer, or that you will install mandatory updates to the software subject to new terms and conditions you would be obligated to agree to but that do not exist at the moment.  Some contracts contain clauses stating that the provider may terminate the contract with you at any moment but that you may not do the same.  Some agreements may require you to submit communications in writing and confirmed as arrived, while their communications may be electronic and on the best effort system.  Clearly license agreements are written in the interest of the provider and does not provide protection for the consumer in any way.

What Can Be Done?


The problem lies in the incentive corporations have to conform to licensing regulations.  Currently there is very little in the way of laws governing what can and cannot be in an end user license agreement.  However, common sense would dictate some pretty straight forward rules.

Firstly, the license agreement must be presented to the user before any other interaction with the product occurs.  That includes websites that claim to bind users to a terms of service agreement.  License agreements should be presented in plain, easily understandable terms.

"The original English version of the Terms may have been translated into other languages. In the event of inconsistency or discrepancy between the English version and any other language version, the English language version shall prevail." should really say "The English version of this contract is the only version that is honoured."  When you cut out all that extra garbage, user agreements aren't so bad to read.

Furthermore, companies providing a service must not be able to transfer the burden of responsibility to the user.  Creators should be liable for the products they produce, because if they are not they are not pressured to build good products.  Providers must never be allowed to transfer costs to the user, in particular many contracts contain clauses covering "legal fees and unspecified expenses".  That basically says that the company can charge you for anything because you gave them a hard time.  Nice.

Finally, contracts should be evaluated on an individual basis for fairness and protection of both parties.  Communication should be the same going each way and termination of contract agreements should also be the same.  Providers and consumers should have equal rights and responsibilities.  It is the user's responsibility to use the product as it is intended, and it is the provider's responsibility to ensure that the product functions and they deliver their services as advertised.  Under no circumstances should a contract void a provider of being held responsible for their mistakes.

As a consumer it is important to read through the terms and services and make informed decisions about what you are and are not willing to accept.  A good alternative may be using open source software.  It doesn't come with any guarantees of functionality, but as is clearly shown above, neither does proprietary software.
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