Do you know that
when you click “agree” you are entering a legal contract?
most terms of service for Internet services are longer and more complicated than most real-estate purchase contracts?
you are being asked to make sure your kids understand it all?
there is no escape from the dense legal jungle, one set of terms leading to another and another, ad infinitum?
Surely one of the least exciting classes of literature, software license agreements and Internet terms of service illustrate vast changes in our relationship with products and services.
For ordinary products, the relationship between providers and consumers is based on a well-established foundation of laws, customs, and standards that grew over time. A solid legal process exists for resolving potential conflicts. Consumers have a general understanding of what they get when they buy something.
This is not true for software or using Internet services. No such common foundation exists. Instead, each software provider writes its own end-user license agreement (EULA), and each service provider writes its own terms of service (ToS) and privacy statement. They are all different. Users are admonished to read them carefully for every app they download and for every service they join.
Most users don’t read them. If they did, they’d find an incomprehensible legal morass that would take many hours and help from lawyers to understand. And all they wanted to do is use that fancy new app!
In this blog we’ll take a look at the language and the structures of these documents from the perspective of an ordinary consumer. In future blogs, we’ll take deep dives into specifics of these terms and conditions.
Do we all have to be lawyers?
Internet companies spend tremendous efforts to continuously make their apps and services easy, intuitive, and addictive to use for everyone. Following their admonitions, though, to (carefully! completely!) read their terms of service and privacy statements drops consumers into a world of legalese that few people without legal training will be able to comprehend. The language, the legal terms, the run-on ALL CAPS sentences are clearly directed at lawyers, not at ordinary consumers. Why then are consumers asked to read them? Are consumers really expected to understand the implications? Documents in other realms using this type of language, for instance real estate contracts of sale, usually come with recommendations to consult an attorney before signing them. Yet some of the terms of service claim that consumers engage in a binding contract simply by downloading and using an app!
As if it were not difficult enough for adults to comprehend these terms, Google recommends that parents read these terms to children under the age required to manage a Google account! Will phrases like “ … TO THE EXTENT ALLOWED BY APPLICABLE LAW, WE PROVIDE OUR SERVICES “AS IS” WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT… “ put the kids to sleep first, or the parents reading to them?
Attempting a somewhat more user friendly wording, Apple asks that parents review these policies with children under the age of majority, to ensure that they both understand them! However, asking that both parents and children understand a 7,900 word document aimed at attorneys is asking even more than just reading it! Will there be an exam?
Who has the time?
After the complexity of the language, the length of the documents is the next almost insurmountable obstacle to understanding these terms. The combined length of the terms of service and privacy statements in most cases exceeds 10,000 words. For comparison, a New York State template for a real estate contract of sale has about 6300 words.
We’re adhorted to read those terms in their entirety. What would it take? Assuming a generous reading speed for complex documents of 100 words per minute, users will need a lot of quality time just to read the documents, never mind doing research of what it all means. Here are some examples, summarizing the word count of ToS and privacy policies:
Ember coffee mug: 13,000 words, more than hours reading time
Microsoft services: 18,000 words, about 3 hours reading time
Google Nest: 25,000 words, more than 4 h reading time
Instead of analyzing the terms by themselves consumers could hire an attorney. In metropolitan areas that would run them typically more than $200 per hour. They’ll just have to hope those attorneys read faster than legal lay people!
Take it or leave it!
In the rare case that people do spend the time reading through these documents, they will realize that they are exposed to merciless diktats. The conditions are totally one-sided. Replete with phrases such as if you do not agree with any of these terms, these documents leave users only two choices, agreeing, or deleting the software, returning the device, not using the service.
As these draconian phrases usually occur at the beginning of the documents, could this be a reason people won’t read the rest?
Once people read them, they will realize more signs of their unequal position in this relationship: most service providers reserve the right to unilateral changes of the terms. That is, after consumers have accepted the initial terms, they either have to accept any future term changes, or abandon whatever investments they have made in a device or service. While many service providers at least promise to attempt notifying their users of changes, others ask users to regularly visit their web site to check for updates.
In most other walks of life, people would not accept being treated this way. What about high tech makes this acceptable?
What does it actually mean?
If consumers, having ploughed through those documents all the way to the end, expected to obtain at least some clarity about what they agreed to, they’d be wrong!
One source of confusion is the scope of services. Many companies, in particular platform companies such as Google, Amazon, and Apple, provide a wide range of services with greatly varying characteristics. However, rather than differentiating the terms to specific services, they are written broadly to apply to a broad set of offerings, regardless of which portion a consumer uses. (Though some platforms are piling up service-specific terms, in addition to the broad set of common terms. See below!) Figuring out what terms reasonably apply to which services is pretty much impossible. The all-encompassing approach feels intimidating.
All over the documents, consumers will encounter phrases like "to full extent of the law” or, even more confusingly, “By law, you have certain rights that can’t be limited by a contract like these terms of service. These terms are in no way intended to restrict those rights.” The relevant legal and regulatory environments in the US varies greatly from state to state, and even more so internationally. This is true in particular with respect to privacy, but also with respect to potential liabilities of both the service providers and consumers. Given these varying legal environments, the terms create more confusion than clarity. How can consumers figure out what limitations apply to them in their jurisdiction? Deflecting responsibility, Apple suggests to “get help from your local consumer advice organization”! Just imagine what would happen if all users of the Apple store were to call Consumer Reports for help!
We’re caught in a limitless web
Many terms of service claim that they represent the sole contract governing the consumers’ relationship with the service. In practice, nothing could be further from the truth!
Most services include in their ToS documents by reference additional terms, from privacy statements to links referencing auxiliary and partner services. Most providers of end-user services use other service providers for their operations, for tasks such as analytics, marketing, and hosting. Some of these service providers are named, many are not named. And naturally, each of those providers has its own terms, and its own sub-service providers. It can go ad infinitum. An interesting 2016 study of Google Nest looks at the depth of these relationships. Here are two quotes illustrating the problem:
However, if a UK-based customer wants to have a comprehensive picture of the rights, obligations and responsibilities of the various parties in the supply chain, he has to read at least 13 legal items.
From a contractual perspective, the customer is unable to identify the parties upon whom the service is dependent and therefore who may potentially be liable in the event of loss.
Since then, things only got worse.
As the big tech platforms have branched out into so many walks of life, the web of terms has expanded as well.
Many platforms have piled up additional terms for the vast spread of their offerings. For instance, Apple has 77 service-specific privacy statements! Google has 104 specific services, many of which have additional terms.
Increasingly, consumer services become interlinked. For instance, the majority of Alexa services has terms issued by the manufacturers of the devices to be controlled by Alexa, in addition to Amazon’s Alexa terms. Google maps uses an extensive set of information sources, some of which restrict the use of their data. Users are encouraged to get in touch with those sources directly!
Many apps and service web sites add links to social media services, exposing user data to those services each of which has their own terms.
What are the practical consequences?
This Jekyll and Hyde approach – making apps and services addictive to use while hiding any negative implications behind impenetrable walls of legalese – turns out to be a key business strategy of the tech companies. On the one hand, they describe their terms in language they know the absolute majority of consumers will never read, much less comprehend. It’s almost as this is the intent in the first place. On the other hand, the content of the terms cements their complete control of their relationships with consumers and their outsize profits margins while obscuring the costs and risks to the consumers.
So far, we have only looked at the language and the structure of these documents. The real issues become apparent when we look at the actual content of the terms.
They shred consumers’ privacy and reap huge benefits from consumers’ data without compensating them.
They isolate the software and service providers from all negative impacts of their products and services.
They expose consumers to substantial risks such as identity theft and 3r party liabilities.
They lock consumers into services, cementing costs and suppressing competition.
In forthcoming blogs, we’ll take a closer look at the content of these documents, and what they mean to consumers.
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