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Nov 1 / Joanna Sturgeon

End User Licensing Agreements (EULAs)

Written by Kimberly Wiljanen

Information policy is a framework of legal edicts and procedures that regulate major portions of daily life in today’s society. (Braman, 2011). The end user licensing agreement (EULA) outlines how a product or service may be used and is very familiar to users of all ages. EULAs are binding agreements that regulate the use of many items ranging from complex software systems to plant seeds. These license agreements can be difficult to circumvent or challenge in court. Trade journalists caution readers to read the fine print carefully before they purchase a product or subscribe to a service. (Da Costa, 2008; O’Bannon, 2009; Langenderfer, 2009). The end user agreements are written to benefit providers with very little recourse if the buyer is dissatisfied.

Langenderfer traces the history of end user agreements through the court system. (2009). He notes a number of key legal cases that mark the evolution and demonstrate the increased sophistication of end user licensing agreements from early copyright laws to modern EULAs. Prebates are one type of contemporary EULA which are applied to items that are shrink-wrapped. Under the terms of a Prebate, the consumer agrees to the EULA terms and conditions when opening the package. The Prebate frequently prevents the user from viewing the terms of the agreement before opening the packaging and entering into a binding contract. In 2000, Klocek won a lawsuit against Gateway when the vendor was unable to prove that Klocek actively consented to the purchasing agreement for an item he bought over the phone. As a result of Klocek v Gateway, most end user licensing agreements today require some type of digital signature or other endorsement from the individual.

In some cases, EULAs are being replaced by digital rights management (DRM) software which can cause a device or media to malfunction if the appropriate DRM is not in place. For example, music CDs played on computers sometimes install digital rights management software automatically. In another case, Lexmark installed code in its printers so that it would malfunction if the user didn’t buy the manufacturers’ brand of ink. (Langenderfer, 2009). Given the increasing sophistication of digital rights management, Langenderfer predicts that the industry will ultimately no longer need end user licensing agreements because the product will simply fail to function. (2009).

Another type of EULA that can be problematic are terms and conditions that govern the use of websites such as Facebook. While websites do need to change their policies over time, they sometimes fail to fully inform users of policy changes. (O’Bannon, 2009). This is worrisome, given that changes may affect ownership and sharing of personal information such as names, addresses, birth dates and other types of data that have been collected in the users’ profile. In effect, any content that users add to a site could potentially be sold or data mined by third parties. Facebook announced a new business model in August that included some of these changes. (Goel, 2013). Facebook acknowledged these changes very reluctantly, perhaps because websites are not required to disclose license changes when users have already agreed to the original contract.

End user licensing agreements do have a place in copyright and patent law. Creators should be allowed to regain the cost of the product design through legal protection. (O’Bannon, 2013). But they often expect to monopolize the market through non-negotiable contracts which grant few rights or protections to users. (Da Costa, 2008). While the court system used to rule in favor of anti-trust laws and individual rights, they are more frequently ruling in favor of patent holders and service vendors. (Langenderfer, 2009).

Today’s consumers are overwhelmed with the variety of products in the marketplace and often ignore the license agreements implicit with using a product or service. (O’Bannon, 2009). This is unsurprising, given the fact that EULAs can be almost as long as a union contract and as difficult to understand as banking policies. People agree to licensing terms because that is what it takes to use the software that they wish to use and there is an implicit belief that there won’t be any serious consequences in the long run. End user licensing agreements should be closely scrutinized for possible hazards and weighed against a list of benefits and acceptable risks.

End user licensing agreements are contracts. They are binding and they are legal. Most of them require some type of signature, to indicate that the message has been read and understood. They are also ubiquitous and therefore treated carelessly. There is little recourse for those who challenge them. Consumers must consider what risks they are willing to take regarding these binding contracts and should always read the fine print very carefully before accepting or rejecting the agreement.

References

Braman, S. (2011). Defining information policy. Journal of Information Policy, 1, 1-5. Retrieved from http://jip.vmhost.psu.edu/ojs/index.php/jip/article/view/19

Da Costa, D. (2008). Jumping through EULA hoops. PC Magazine. Retrieved from http://www.pcmag.com/article2/0,2817,2243185,00.asp

Duff, A.S. (2004). The past, present and future of information policy. Information Communication and Society, 7(1), 69-87. DOI 10.1080/1369118042000208906

Goel, V. (2013). Facebook to update privacy policy, but adjusting settings is no easier. New York Times Technology. Accessed September 2, 2013 from http://bits.blogs.nytimes.com/2013/08/29/facebook-to-update-privacy-policy-but-adjusting-settings-is-no-easier/?_r=0

Langenderfer, J. (2009). End-user license agreements: a new era of intellectual property control. Journal of Public Policy & Marketing, 28(2), 202-211. doi: 10.1509/jppm.28.2.202

McBride, M. (2012). End-user license agreements: what you need to know. Medical Economics, 89(12), 49-51. Retrieved from http://ezproxy.msu.edu:2047/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bft&AN=85217824&scope=site

O’Bannon, I. M. (2009). Privacy policies & user agreements. CPA Technology Advisor, 19(6), 12-14. Retrieved from http://ezproxy.msu.edu:2047/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=44498493&scope=site

2 Comments

  1. Kim Wiljanen / Nov 13 2013

    Thank you Dr. Braman. I will look it up.

  2. Sandra Braman / Nov 10 2013

    You may find a comparative analysis of the terms in EULAs of interest. The research took place a while ago, but the issues, and many of the specifics, remain the same. See “Advantage ISP” –

    Braman, Sandra & Lynch, Stephanie. (2003). Advantage ISP: Terms of service as media law, New Media & Society, 5(3), 422-48.

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