More on Terms of Service

When Jefferson Bailey & I finished writing My Web Browser's Terms of Service I thought I was done with the topic, but two recent articles bought it back into focus. Below the fold are links, extracts and comments.

In Ticking all the boxes, The Economist writes about an interesting legal theory underpinning a rash of cases in New Jersey:

The suits seek to exploit the Truth-in-Consumer Contract, Warranty and Notice Act, enacted in New Jersey 35 years ago. This was intended to prevent companies that do business in the state from using contracts, notices or signs to limit consumer rights protected by law.

These suits:

generally include allegations that online terms violate consumers’ rights to seek damages as protected by New Jersey law and fail to explain which provisions cover New Jersey. ... plaintiffs need not show injury or loss in order to sue but merely prove violation of the TCCWNA.

The risks to companies are significant:

the TCCWNA entitles each successful plaintiff to at least $100 in damages, plus fees to lawyers and so on. If a website has millions of visitors, the costs to a company could be staggering.

But they are balanced by longer-term risks to consumers:

A growing number of firms, emboldened by favourable Supreme Court rulings, have adopted clauses that limit class-action suits. Consumers are instead restricted to resolving disputes individually, in arbitration. The TCCWNA cases may inspire more firms to add such caveats. That might limit frivolous suits. But consumers with grave complaints would be unable to sue, either. In the end lawsuits over restrictive contracts may make them more restrictive still.

An example of this trend is Pokemon Go:

to play Pokemon Go, you have to accede to a binding arbitration clause, surrendering your right to sue and promising only to seek redress for any harms that the company visits upon you in a system of secretive, one-sided shadow courts paid for by corporations where class actions are not permitted and the house always wins. ... Pokemon joins a small but growing movement of online services that strip their customers of their legal rights as a condition of sale, including Google Fiber and Airbnb

It could be worse, in this case you can send an email:

within 30 days of creating your account, and include in the body "a clear declaration that you are opting out of the arbitration clause in the Pokémon Go terms of service."

In The Biggest Lie on the Internet: Ignoring the Privacy Policies and Terms of Service Policies of Social Networking Services, Jonathan Obar and Anne Oeldorf-Hirsch report on:

an empirical investigation of privacy policy (PP) and terms of service (TOS) policy reading behavior. An experimental survey (N=543) assessed the extent to which individuals ignore PP and TOS when joining a fictitious social networking site, NameDrop. Results reveal 74% skipped PP, selecting ‘quick join.’ For readers, average PP reading time was 73 seconds, and average TOS reading time was 51 seconds. Based on average adult reading speed (250-280 words per minute), PP should have taken 30 minutes to read, TOS 16 minutes.

Among the clauses that almost all experimental subjects missed were ones requiring:

data sharing with the NSA and employers, and .. providing a first-born child as payment

The thing is, consumers are probably being rational in ignoring the mandatory arbitration and the terms of service. Even with a class action, the terms of service are so stacked against the consumer that a win is highly unlikely, and if it happens the most the consumer can expect is a mountain of paperwork asking for proofs that they almost certainly don't possess, in order to stake a claim to the crumbs left over after the class action lawyers get paid.

A social network that started suing its members for the kinds of things everyone does would be out of business very quickly, so the details of the terms are pretty irrelevant compared to the social norms of the network. The privacy terms are perhaps more important, but if you care about privacy the last thing you should be doing is using a social network.