What happens when you click ‘agree’?
Apple prohibits using its iTunes service for the manufacture of nuclear or biological weapons. Amazon will permit its cloud computing service to be deployed to help combat a zombie apocalypse that could “result in the fall of organized civilization.”
Those clauses are in jest, buried deep in the tech giants’ online terms of service, but they highlight how most people have no idea what is signed away when they click “agree” to binding terms of service contracts — again and again on phones, laptops, tablets, watches, e-readers and televisions. Agreeing often means allowing personal data to be resold or waiving the right to sue or join a class-action lawsuit.
Violations of such terms and conditions agreements recently gave Amazon the power to block the right-leaning social media site Parler and for Twitter to ban Donald Trump and to sweep tens of thousands of QAnon pages into the digital ether. Time will tell the degree to which tech companies will police their own sites in the coming months and years. But if they do, terms and conditions will be a pretext they use to do so.
The potential for abuse on the one hand and restricting speech on the other hand has spurred calls for major reforms to the tech sector from politicians of both parties. Courts and lawmakers are also zeroing in on reforms to terms of service agreements that would help reset the balance of power between consumers and tech companies. At the same time, several large companies, like Google and Facebook, have been buffeted in recent months by antitrust lawsuits and investigations into their market dominance. Regulators and lawmakers say their propensity for acquiring smaller rivals, gobbling up user data and striking exclusive deals with one another has allowed them to operate illegal monopolies that ultimately hurt consumers.
The root problem is that consumers are simply outgunned.
Because corporations and their lawyers know most consumers don’t have the time or wherewithal to study their new terms, which can stretch to 20,000 words — about the length of Shakespeare’s “Julius Caesar” — they stuff them with opaque provisions and lengthy legalistic explanations meant to confuse or obfuscate. Understanding a typical company’s terms, according to one study, requires 14 years of education, which is beyond the level most Americans attain. A 2012 Carnegie Mellon study found that the average American would have to devote 76 work days just to read over tech companies’ policies. That number would probably be much higher today.
At its core, the arrangement is unbalanced, putting the burden on consumers to read through voluminous, nonnegotiable documents, written to benefit corporations in exchange for access to their services. It’s hard to imagine, by contrast, being asked to sign a 60-page printed contract before entering a bowling alley or a florist shop. Though courts have held terms of service contracts to be binding, there is generally no legal requirement that companies make them comprehensible.
It is understandable, then, that companies may feel emboldened to insert terms that advantage them at their customers’ expense. That includes provisions that most consumers wouldn’t knowingly agree to: an inability to delete one’s own account, granting companies the right to claim credit for or alter their creative work, letting companies retain content even after a user deletes it, letting them gain access to a user’s full browsing history and giving them blanket indemnity. More often than not, there is a clause (including for The New York Times’ website) that the terms can be updated at any time without prior notice.
Some terms approach the absurd. Food and ride-share companies, like DoorDash and Lyft, ask users to agree that the companies are not delivery or transportation businesses, a sleight of hand designed to give the companies license to treat their contract drivers as employees while also sheltering the companies from liability for whatever may happen on a ride or delivery. Handy, an on-demand housecleaning service, once sought in its terms of service to put customers on the hook for future tax liabilities should their contract workers’ job classification be changed to employee. Uber requires most global users outside the United States to adjudicate their grievances only in the Netherlands, which the Canadian Supreme Court last summer found “unconscionable” — while Facebook and Google simply switched their United Kingdom customers to U.S. terms when local laws didn’t serve their needs.
“This is one of the tools used by corporations to assert themselves over their customers and whittle away their rights,” said Nancy Kim, a California Western School of Law professor who studies online contracts. “With their constant updates to terms and conditions, it amounts to a massive bait-and-switch.”
Technology companies will assert that none of their policies are mandatory — if customers don’t want to accept them, they can close their accounts or decline to sign up in the first place. But many companies have made their services so essential that opting out is not a feasible option, and customers are often presented with new terms at the moment they most need to use a service. Consider how difficult it would be to avoid signing up for a single Google product, let alone to retrieve saved emails or photos, if the account has to be closed quickly.
The foundation of such online contracts dates to when software was sold in a box, and the terms of service inside were considered agreed to when a customer opened the shrink wrap. Ever since a 1996 ruling upholding this notion, companies have tested the limits of so-called shrink-wrap agreements through increasingly creative means, like hiding terms of service behind layers of hyperlinks, burying them in small print, forcing users to agree before they can get access to a previously downloaded app or making the terms binding when a customer simply opens a webpage. Lyft, for instance, informed many customers last month that its terms had changed — a week after the fact.
“We have become so beaten down by this that we just accept it,” said Woodrow Hartzog, a Northeastern University law professor. “The idea that anyone should be expected to read these terms of service is preposterous — they are written to discourage people from reading them.” Contracts are, in theory, meant to be mutually agreeable. How can they be if they’re designed so consumers cannot understand them?
There are signs of waning tolerance to all this. Early this month, a Massachusetts court found that Uber failed to make its terms clear because it had hidden them in a hyperlink on the third page for new customer registrations, with no click-to-agree requirement. Sen. Sherrod Brown, D-Ohio, has proposed legislation aimed at improving transparency around privacy policies that govern how consumer data is used. In 2016, Congress made it illegal to include clauses that prohibit consumers from posting negative reviews.
But the burden remains far too great for average consumers. Because courts have largely sided with the tech industry on terms of service rules, Congress needs to act.
Lawmakers should consider instituting rules that require greater transparency around changes to companies’ terms of service and clearer means by which customers agree to them. Burying them in novella-length documents is neither honest nor forthright.
Another smart requirement would be to clearly highlight the changes in a new policy and to include a discussion in plain English about how they will affect regular users, particularly when they have a grievance. If a company’s online service is open to 13-year-olds, as many are, then the terms of use need to be written so an eighth grader can understand them — in fact, such a standard may be warranted for all such user agreements. That would be a step toward informed consent, allowing for the possibility that an eagle-eyed consumer catches something unconscionable.
That said, better and more frequent disclosure may have the unintended effect of making onerous conditions more enforceable, because users would be better informed of them, said Omri Ben-Shahar, a University of Chicago law professor. Consumers would be best served knowing that certain terms are never allowable by law, even if disclosed, particularly companies’ attempts to absolve themselves of all liability for harms suffered through negligence or poor manufacturing, as well as predatory financial terms.
Other rules could set intervals between informing customers of new terms and when they take effect, and prohibit automatic contract updates without customers’ consent.
There is broad and bipartisan agreement that the biggest tech companies are far too powerful. A pending set of antitrust lawsuits could lay the groundwork for a more competitive future for startups, giving consumers greater choice and leading to superior services. But it’s past time to begin to restore power to consumers by curbing tech companies’ everyday overreach through lopsided consumer contracts.