UK Report Slams EULAs

draevil writes "Britain's National Consumer Council has completed an investigation into the practice of software End User License Agreements(EULAs) with the conclusion that many consumers are signing away their legal rights and agreeing to unfair terms, which they could never have scrutinized before purchase. The report also acknowledges that even if the EULA were available prior to purchase, it would be unreasonable to expect an average consumer to understand the terms to which they were agreeing. Here are the full report (PDF) and a summary." The NCC recommends that the European Commission bring softwre licenses under the same consumer protections that apply to other products in the EU.

A terrific "indirect" attack!

[erroneus]

The EULA has for a VERY long time been a form of consumer abuse that has been tolerated for far too long. While I have little doubt that this is likely to be an attack against Microsoft, once again, but this time it will address a kind of global form of consumer abuse that had likely started with Microsoft but has become a standard practice in the industry.

Of course if it were allowed, every other player in every other industry would hope to disclaim liability for anything and everything they sell you. But most governments, local, regional and national already have consumer protection laws in place to form the base-line of product liability. But for some reason, software as a product or as a service has somehow been overlooked in most areas (though some states in the US have consumer protection laws that include software). It'll be about time to see those same laws apply to software.

Re:They didn't review the GPL

[I confirm I'm not a]

> Does the GPL also create an imbalance between the rights of the distributer and the rights of the consumer?

I wouldn't have thought so, since consumers can freely read the GPL before using the GPL-licensed application, and the GPL effectively empowers the consumer to become a distributor. I had a quick peek at the relevant legislation [opsi.gov.uk] and couldn't see anything that would affect the GPL.

IANAL etc etc

There is one thing I want to know...

[zappepcs]

If they revamp how EULAs are used and written, will they still include caveats for government retribution against the impossible case where they find you have done something that is illegal no matter what software you might have used?

http://sycrat.com/sycrat/screenshots/screenshot1.png [sycrat.com] NO WMDs please

Yes, I know the example is for US cases, but just the same.

Re:I am not handsome enough to be a lawyer

[Sorthum]

And one more that you neglected:

The option to back out. By the time you have the EULA on your screen, you've already paid for the software. "Hell no" isn't a viable option; have you ever tried to return open software to a retail store?

Seems strange..

[Mascot]

with the conclusion that many consumers are signing away their legal rights

One might argue that if the law is so weakly formulated that it is rendered invalid simply by one party telling the other that it is, then the law is the problem not the EULA. Haven't read TFA so no idea if this is just another misleading summary or not, but it strikes me as strange that would be possible in most any country.

Where I live there's no way to sign away my legal rights. A EULA can demand I agree to being boiled in oil if I reverse engineer the program, but that means less than the pixels used to display the EULA in the eyes of the law. Especially since reverse engineering something to make it suit my needs is explicitly protected by law last I heard.

Come to think of it, don't most EULAs actually include a phrase stating it's not applicable where void by local legislation?

Not quite

[aepervius]

In many country (in EU for example) you cannot give up fundamental right, or agree to give up protection of the law by signing a contract. This in many case nullify the contract utterly. But surprise, surprise, many of those EULA (particularly the one drafted for the US and just translated) just do that, for example in saying they are not liable for any damage occasioned by the software. Although in recent year I saw in a lot of EULA added "except in the country which forbid such clause, in which case it does not apply" or something similar.

I USED to before install go and change the text of the EULA for fun (so that the CEO of the software maker give me his first born). Or delete the text file before install. Or ask my nephew to install your software (kids aren't contractible if parents refuse). Such shenanigan would not happen with a real signed contract.

Re: They didn't review the GPL

[Black Parrot]

Does the GPL also create an imbalance between the rights of the distributer and the rights of the consumer?

Don't know, but what's important is that we play by the same legal rules regardless of the license. Can't say shrinkwrap is enforcable but GPL is not, nor vice versa.

TPB license agreement

[syousef]

...which one reason why lots of people have, rightly or wrongly, replaced their EULA with the pirate bay version. Download it illegally, ignore the license, install and play with it. If they need it or are using it and feel guilty buy it. Even when they do buy it a lot of users continue to ignore the EULA. I'm not condoning this behavior but I am saying that onerous conditions in the EULAs directly contribute to piracy.

The other thing is that no one reads all their EULAs thoroughly. If they did heavy computer users would be complaining about spending weeks installing software (or not understanding something about the EULA), when in reality software installation is something people often are doing in their "spare" time after all their other obligations are met. I've found that those people who suggest they do read all their EULAs are either doing it for a job or socially impaired or just plain liars.

Most people just understand that unless it's free software it's not legal to copy. Beyond that they use their software however they choose paying no mind to the EULA. In fact I've come across many a game forum where people openly are flouting the terms of the EULA and the company who creates the game turn a blind eye and don't wish to even discuss licensing issues beyond regurgitating the "copying is stealing" mantra. This is enough enforcement for the company to benefit from the inclusion of the EULA for individual users. Only when the software is used on a grander scale contrary to the EULA does the company act to put a stop to that use, and even then only when it hurts their commercial interests.

Re:No need.

[wilder_card]

"I'll point out, most people think that limitations on liability that limit your damages to $0 as some of the most heinous parts of EULAs." True, BUT. Most people think if they pay something for software, they have a legal right to expect that it does what it says. However, if they didn't pay for it, it would be grossly unreasonable to expect the same legal rights.

Re:I am not handsome enough to be a lawyer

[milsoRgen]

have you ever tried to return open software to a retail store?

Indeed, returning software is just not an option. I was just having this discussion with my girl friend about my BitTorrent usage, how I need to try before I buy games. That's simply not an option (trying) for many games, and even games that have demos available are quite often based on beta code. But anyways, why should I be penalized when everything on the box points to a runnable program, only to find out the requirements are a little more liberal than I would expect. It's the same deal with the EULAs, once cash money has been paid and you start reading those things... What do you do, take the hit? That appears to be the only option.

It needs to be pointed out, piracy is the stated reason I cannot return opened software. Yet not being able to return opened software is driving me to piracy...

Re:No need.

[Mr2001]

In this sense, [the GPL] is an agreement with END USERS. Among other things, it grants to the end user the permission to run the software.

Since when do you need permission to run software that you've legally obtained? You can reject the GPL's terms and still keep using the software, as long as you don't distribute it.

Re:I am not handsome enough to be a lawyer

[cfulmer]

That is horrible advice and is worth far less than what I paid for it.

Sure, unconscionable contracts, or unconscionable clauses in contracts are not enforced, but "unconscionable" != "very one-sided". And, penalty clauses are often not enforced. But, there are plenty of very one-sided agreements that are regularly enforced -- your credit card agreement is probably one of them.

Plus, if you sign a contract with no intention of ever following through, you may end up getting hit with punitive damages.

Lets call it by its true name

[Anonymous Coward]

The option to back out.

Let's call it by its true name: Coercion.

By the time you're presented with the EULA, you've already exchanged money for a box advertising the features of the software. That's a contract if ever I heard one. The EULA attempts to force you into a new contract, with NO CONSIDERATION beyond releasing their hold on the features and properties of the software that are already yours. That is coercion.

And no, disclaiming on the box that you have to agree to a contract is NOT sufficient if they are not disclosing the terms of the contract itself.

IANAL, but I have studied with one.

Re:return-to-store test case

[sfarmstrong]

"Wait for the store to transfer the case to regular court. Amend your suit to include legal fees and triple damages for being an ass, offering to settle for the original purchase price plus legal fees incurred so far all the while, so the judge knows you aren't being an ass."

I don't know about other jurisdictions, but Ontario requires that claims under $10,000 be resolved in Small Claims Court. Because the courts are for all people, and your government cares.

Suing to return your software is very easy, but almost certainly not worth the effort for each individual consumer.

This is what class actions are for. Of course, if you're going to do a class action, you're far better off suing the software company that drafted the oppressive EULA in the first place. Or filing a complaint for anti-competitive practices.

There are ways to fight abusive big businesses, but personal law suits are rarely the answer.

US courts are okay with them, this is the EU/UK

[SmallFurryCreature]

There is a difference, in the EU consumer rights mean something.

Do you know about dead pixels in LCD screens? The one the industry tells you are acceptable? Dutch law clearly FORBIDS this. ANY LCD with a single defective SUB-pixel has to be replaced. No argument possible. The netherlands is the only country where sony replaced every PSP with ANY pixel problems.

So you are right in saying these EULA's are not illegal in the US, but the EU has far better laws for protecting the consumer and it has long been known by any who follows consumer afair programs they are entirely without worth within the EU and any company that tries to take you to court over one will find a very hostile judge. Hence why they never been tested, the companies know they will loose it.

Re:Lets call it by its true name

[slcdb]

And no, disclaiming on the box that you have to agree to a contract is NOT sufficient if they are not disclosing the terms of the contract itself.

Like it or not (I don't) many US courts have decided that such a disclaimer on the box is sufficient (see ProCD v. Zeidenberg).

However, I don't think this detracts from your coercion argument. Even if the EULA is considered to be an extension of the contract for sale that was begun in the store, the buyer has already taken on the responsibilities of ownership by the time the EULA is presented (e.g. risk of loss, theft, or damage to the goods in transit to the buyer's home). Therefore the buyer must also obtain the rights of ownership. One of the rights of ownership of software is the right to use the software with a computer (section 117 of the Copyright Act bestows this right). The EULA is an attempt to interfere with this right.

So, even if the EULA is viewed as an extension of the contract for sale, any terms in the EULA that interfere with the buyer's ownership rights are, by that time, unconscionable. And the attempt to force the user to agree to those unconscionable terms is still coercion.

Re:return-to-store test case

[AKAImBatman]

Doesn't matter. In this case a unilateral offer was made as a method of returning the item. By attempting to return the item to the store, you are exercising the terms of that offer. If the EULA writer was unable to uphold those terms, then he shouldn't have made the offer.

That being said, the store is unlikely to get off so easily. IIRC, the laws that govern retail business and make EULAs possible expect that a consumer should be able to return through a retail outlet. The judge may or may not be happy about the store's unwillingness to let you reject the terms of purchase.

The most likely outcome is that the store would not show up for the small-claims case, and you'd win by default. Then they'd stonewall your attempts to retrieve your money. In the end, you'd have to sell the judgment to a collection agency at a loss.