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Can Consumers Use Apps to Change the Terms of Online Contracts? A New End User License Agreement Opt-Out Website Offers a Clever, Valid Tool

As consumers, we are unlikely to read the fine print on most of the contracts we enter into online.  Instead, we simply click “I Agree,” impatient to get access to goods or services that are just a click away.

Yet we also find ourselves getting irritated when we learn that one of our favorite websites has suddenly changed terms without giving us any notice or choice.  This often happens when a site makes privacy-related changes—for example, when users’ information is suddenly shared with other users.  But sites make other changes to which users must consent, as well.

For instance, Sony recently amended the terms of its End User License Agreement (EULA) and asked PlayStation users to click “Agree” to the lengthy new Terms of Service before they could access their games.  Moreover, to opt out of a particular term, relating to class-action lawsuits, users had to send a letter to Sony within 30 days.

Imagine a group of gamers desperate to get online:  Will they really read through the agreement and send Sony opt-out letters?  Probably not.  But a group of gaming techies took matters into their own hands and offered PlayStation users a simpler, quicker solution:  They developed a website and a program to take care of opting out.

As I will discuss below, this new web tool or “app” is a brilliant example of how technology can help consumers gain more bargaining power in their contractual relationships with companies.  I will also discuss examples of other technological tools that are designed to help consumers deal with the murky world of fine print in online contracts.

How the New Opt-Out Service Works, and Why It Likely Creates Valid Opt Outs

To begin, I’ll set forth some more details about Sony’s changed contract terms.  In late September, Sony put out a new version, Version 12, of its Terms of Service (ToS), which users had to accept in order to play games on the PlayStation Network (PSN). The updated ToS requires users to give up their right to participate in class-action lawsuits against Sony, relegating them to individual, out-of-court arbitration instead.

However, it turns out that there is a way to opt out of this particular clause in the ToS and still play games online—based on another clause that was buried in the ToS.  Why would Sony include such a clause?  Currently, many no-class-action clauses and other dispute-resolution contract provisions are being challenged in court, on the ground that they are unfair, unconscionable, or somehow contrary to public policy.  Thus, Sony’s opt-out clause may be a defensive move to show that the company did not try to unfairly restrict its customers, and to ensure that Sony would prevail in any future dispute over the new ToS.

Sony may also have believed that including the clause would have little cost.  After all, the opt-out section is buried deep in the ToS and is easy to miss.  It reads:

“If you do not wish to be bound by the binding arbitration and class action waiver in this Section 15 you must notify SNEI [Sony Network Entertainment] in writing within 30 days of the date that you accept this agreement.”

So in order to opt-out, a customer must first accept the updated ToS and then, within 30 days, send Sony a letter that includes the following information: name, PSN account number, and a “clear statement that you do not wish to resolve disputes with any Sony entity.”

Gamers Opt Out Offers an Easier Way to Opt Out of Terms-of-Service Changes

To opt out, busy gamers are required to stop and write to Sony.   How many gamers or other consumers who are reliant on the Internet and email would spend the time to write a letter, buy a stamp, and post it?

Fortunately, a new website, GamersOptOut.com, makes opting out much easier, by sending a letter on your behalf to a company that has changed its ToS.  Currently, the website features an opt-out form for Sony’s PlayStation network and one for Electronic Arts—which has a new online gaming service, Origin.

The Gamers Opt Out site describes its founders as follows: “Gamers Opt Out is a collective of gamers who are sick of absurd EULAs from game companies. These EULAs have clauses preventing class-action lawsuits, though you can opt out of the clauses by sending a letter. We want to make it easier for everyone to opt out because Sony, EA, et al [sic], believe most people won’t bother to.  Let’s show them they’re wrong.”

The site is currently funded via donations, and includes a counter that shows you how many letters a donation has funded.  It requires that you provide some personal information, including your PSN or Origin account name and address, in order to generate an opt-out letter on your behalf.

Some bloggers have warned users of the site to beware, however, since the site’s operators do not reveal their true identities—just their Xbox Live, Playstation, and Twitter identities.  Thus, users are giving the site operators more personal information than the site operators are giving them.

From a practical point of view, the prohibition on class actions is unlikely to affect many of a company’s users.  Empirically, it turns out that few people actually participate in class actions—either as named plaintiffs or in later settlements.  But for some users, it’s the principle of the thing:  They are unhappy to see their contractual rights, or the company’s duties to them, constantly changed or restricted in a unilateral fashion.  Moreover, the same users who take the time to opt out also might well be the ones who end up being active in a class action if one is eventually filed, so for them, the opt-out may be worthwhile.

The Electronic Frontier Foundation’s Terms of Service Tracker and Other Helpful Apps Also Address the ToS Situation

In addition to the Gamers Opt Out approach to ToS changes, there are other useful tools in this area—which may demonstrate a growing trend of tech-savvy consumers using apps to try to alter the balance of power in online contracting.

For instance, in 2009, the Electronic Frontier Foundation (EFF) launched TOSBack, a Terms of Service Tracker for Facebook, Google, eBay, and other sites.  TOSBack allows users to track changes in the online policies and TOS of major websites, such as Facebook and Google, that many of us use everyday, and to learn how these ToS are changing over time.

Indeed, at www.TOSBack.org, users can see a real-time feed of changes and updates to more than three dozen polices from the Internet’s most popular websites.  Clicking on an update brings you to a side-by-side before-and-after comparison of changes—showing what has been removed from the ToS, and what has been added.  Then, if you like, you can stop using a particular service, or protest the changes to the company responsible, and/or try to convince other users to do the same.

EFF launched TOSBack in reaction to key TOS changes by leading companies, such as Facebook’s 2009 modification of its terms of use that seemed to give the company the right to use members’ content indefinitely. After a user outcry, Facebook announced that it would restore the former terms while it worked through the concerns users had raised.

Kevin Owocki’s TOSAmend Applet Is Interesting, But Is It Legally Effective?

Finally, another recent tool attempts to give users more control—this time, by proposing modifications to online form contracts.

Kevin Owocki’s TOSAmend is a creative browser applet that allows you amend non-negotiable ToS that you had to click through and “agree” to in order to access many online goods and services.  The TOSAmend program causes your new revised ToS to be submitted along with your “I agree” click. Then, the service provider or online retailer purportedly can agree, disagree, or modify your terms and send them back – as in an old-fashioned contract negotiation.

This tool is an interesting twist on online contracting.  In essence, it allows consumers to make counteroffers to companies, based on proposed new contract terms.  TOSAmend is definitely clever, but it is unclear if it will actually lead to revised or customized online agreements between consumers and major websites.   Right now, there are at least two problems for TOSAmend. First, many ToS prohibit users from doing exactly what TOSAmend does: trying to unilaterally change the terms of an offer or the agreement.  Second, if a consumer emails a company with proposed modifications, the email will likely be ignored.  Granted, some companies might take the time to read proposed revisions—especially if numerous users are proposing the very same revision.  And, in theory, some companies might actually use popular proposed user revisions when revising their ToS, but that scenario seems likely to be rare.

When a user sends a company new proposed terms via TOSAmend, the new terms will not be deemed effective unless they comply with traditional contract law on the acceptance of an offer.  Possibly a company might be deemed to have accepted a consumer’s counteroffer through its actions and performance—but each contract is different.  Thus, at this point, it would be premature to state that TOSAmend has actually created new valid and enforceable agreements just through the click of a button and a consumer’s submission of revised TOS.

It will be interesting to see how these varied applications may change the contracting landscape for consumers.  Someday fairly soon, it’s possible that—rather than just clicking “I agree”—consumers may be able to use technology to inject some of their own preferences into the bargain they strike with the companies with which they do business.

Anita RamasastryAnita Ramasastry is the UW Law Foundation Professor of Law at the University of Washington School of Law in Seattle, where she also directs the graduate program on Sustainable International Development. She is also a member of the Law, Technology and Arts Group at at the Law School. Ramasastry writes on law and technology, consumer and commercial law, and international law and globalization.
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  • Ted Harvatin

    This seems like a much more realistic, proactive and logical way to address “corporate greed” than sleeping in tents to get yourself on the nightly news.  Of course, the former takes work, the latter is a way to hook up.

  • Mmm

    Anita – you write, “First, many ToS prohibit users from doing exactly what TOSAmend does:
    trying to unilaterally change the terms of an offer or the agreement.”

    Let’s be clear here. Those ToS are not binding on either party until acceptance.  The fact that the unrevised language has a no-amendment-without-written-acceptance clause has no bearing on whether the new, revised terms are effective.  that language is merely prescriptive of behavior after acceptance.

    Even if it is present in the FINAL agreement, it has no bearing on the analysis when the changes were made prior to acceptance.

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