Will the FTC Target EULAs Next?

A few weeks ago, we discussed news that the Federal Trade Commission was planning to look into DRM and the way its characteristics are communicated to customers. Now, Joystiq's Law of the Game column speculates that EULAs could be on the FTC's list to review as well. "I would be willing to guess that within the next few years, the often maligned End User License Agreement ('EULA') may fall into the realm of being regulated as further 'consumer protection.' Is it necessary? ... The first and most common method [of consumer protection] is what is known as a 'plain language requirement.' The idea is that contracts written by lawyers are full of legal terms and are written in such a way that it takes a lawyer to decipher the actual meaning of all of the clauses. ... on the complete opposite end of the spectrum, it could be required that companies abandon EULA contracts all together in favor of a collection of FTC approved bullet points. The development and legal communities would, I assume, vehemently oppose this idea, but it is possible. Basically, the FTC would come up with a list of things all EULAs include, then a list of optional provisions that the licensor (the game company) could include."

Comments

The opposite of what the EULA was invented for.

[dotancohen]

I would be willing to guess that within the next few years, the often maligned End User License Agreement ('EULA') may fall into the realm of being regulated as further 'consumer protection.

It won't because it was never meant to be 'consumer protection' and that is quite a perversion of the EULA's real purpose: 'corporate protection'.

Re:The opposite of what the EULA was invented for.

[arogier]

What would mandates inclusions to an EULA do to the GPL or BSD licenses. If some sort of admission of some level of liability for defects in the product are mandate, would free software projects at least on the face have to be handled officially at least as private betas? I could see some big corporate money contributing to legislation on EULAs for "consumer protection."

Re:The opposite of what the EULA was invented for.

[ItsColdOverHere]

I may be misunterstanding the tone of the quote but it seems to me that the 'consumer protection' being discussed here is the actual regulation of EULAs.
  To put it more clearly: It seems to me that the FTC would regulate EULAs to protect consumers from being screwed over by software makers' overly complicated EULAs

Re:The opposite of what the EULA was invented for.

[sumdumass]

There is never a EULA on a virus or trojan. The government just wouldn't have the ability to enforce one nor would it have the ability to make you accept one. There would be no EULA on spyware cops install onto suspects computers, there would be no EULA requirements on software obtained outside the US even though the User is sitting inside the US. In other words, requiring a ELUA in every instance is impossible and would present an unnecessary burden on US software sales.

Now that being said, the situation is probably going to be a If you do X, you are bound by these rules. If there is no EULA in the first place, one probably will not be needed and straight copyright/Patent law will govern. The original EULAs were only statements that you didn't buy the copyrights to the software just the right to use your copy within the bounds of copyright law.

What has happened is that EULAs have included terms that can allow a software manufacture disable competitors programs, stop you from having your fair use rights like the right of first sale or in some cases, they even deny you the right to talk negatively about the programs or it's performance. There are lots more weird and somewhat evil things and I suspect they are attempting to reign this under control as well as stop companies from advertising this product does this the best and then claim it isn't able to do it in the license to escape damages when it screws up. Well, you know, the shit the article talked about.

I doubt it will have any real effect on GPL or BSD programs.

Re:Legal?

[im_thatoneguy]

Isn't every EULA a '* wrap license'? What do you do if you don't agree to a EULA? I don't know of any stores that will accept software once you've opened it. In order for anything in the EULA to be binding it needs to be agreed to prior to transaction. So it would seem to me by definition a EULA is legally worthless. I've spent money. Whatever was marketed on the packaging is what I agreed to purchase. No "take backs". Transaction done.

Bah! Leave It Alone

[BlueStrat]

Anyone actually think the government is getting involved to make EULAs fair for consumers?

I mean, think about it. Right now, they're basically fairly unenforceable without the corporation and EULA in question having to go to court and at the minimum get a decision in a particular case and maybe set an individual precedent.

If EULAs basically have no or very little legal weight currently, what's the purpose of the FTC getting involved, unless it's to give them force? Especially now that there's a more media-and-entertainment-industry-friendly government in power now.

Having the FTC get involved means that EULAs will then have a legal framework of government regulations to back them up. It's certain that any such regulations will allow consumers to get bent-over all legal-like, either by what's actually in the regulations, or what they allow by omission and loopholes in the wording.

In looking out for citizens' rights and interests vs corporate interests & profits, I trust the government about as far as I can throw the US Capitol Building.

Cheers!

Strat

EULAS

[scientus]

EULA's are not very enforceable: users don't agree to them and they are contracts of adhesion.

No papers are signed, both parties do not generally agree, and they are filed with unconscionable statements.

Almost all EULAs claim to limit users right to resell the software, however this is unenforceable due to the First-sale doctrine

Copyright gives sole right to its holder the right to create copies of works, however it does not allow that holder to control what their work is used for after it has been purchaced. (besides having purchasers not make more copies of it)

Re:EULAS

[wild_quinine]

EULA's are not very enforceable: users don't agree to them and they are contracts of adhesion.

I wish that were true. Unfortunately what once worked for us (the fact that nobody could really do anything about it if we broke the EULA) now works against us: companies are starting to limit our rights using online activation and restrictions, and now we're the ones who can do nothing about it. A few flailing class actions aside, who's going to go to court over a $40 game? What shops take opened products back - especially ones that are now useless?

Almost all EULAs claim to limit users right to resell the software, however this is unenforceable due to the First-sale doctrine

I wish that were true, too. But since many games that you buy these days are tied to an online account, which in some cases contains the rights to play all of your other games, you really can't resell them. The few services that let you sell individual games from such an account generally charge a 'nominal' fee, which is just enough to make it under no circumstances worth doing so.

You can sell your whole account of course, if you want to sell all your games at once.... except that you can't, of course. If you sell your World of Warcraft or Steam account, that's grounds for it being cut off.

I understand that you're using the term 'unenforceable' to mean 'not legally enforcable'. But let's not beat around the bush - this stuff is starting to become very easy to enforce in spite of the law, and nobody is, or currently can, do anything about it.

I also understand that it's not all about the games. In fact, the most unconscionably EULAs usually are on corporate software. But I talk about games primarily because I know games, I used to love games, and I'm genuinely losing interest in one of my favourite hobbies because of how the customer is being treated.

Re:EULAS

[Anonymous Coward]

Hell, Microsoft ist selling non-resellable OEM copies without media now, as well as several versions of Windows designed to only work on the first computer they are installed on, codified in the so-called license. Have fun.

Yet another reason people should ditch Microsoft and their appalling excuse for a operating system.

Letting a private company own your ways of communication and expression is pure stupidity. In doing so you allow that company to ruin your work and intrude upon your life.

http://arstechnica.com/microsoft/news/2007/07/microsoft-patents-the-mother-of-all-adware-systems.ars

Re:Legal?

[Joe U]

Most companies started puting disclaimers on the boxes saying "this product is governed by a "end user license agreement" goto Thisweb.site, read and agree to the EULA before opening this product.

I think that should be tossed out as well. It requires you to find an Internet connection and look up something on a website while standing in a store thinking 'hey, this new game looks like fun, I think I'll buy it'. It's the equivalent of the "Beware of the Leopard" display method.

There's a simple solution that absolutely no major company would ever resort to. Put the EULA on a fold out attached to the box and optionally make the end user sign it before purchase.