Consumer Watch: Software Licenses--Fight for Your Rights

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Would you buy a toaster if there was a chance it might not work properly when you got it home? Well, probably. After all, anyone could end up with a dud.

But what if the toaster's maker--let's call it Toastersoft--denied any responsibility for the product's problems, defects, or hazards, even if it knew they existed?

Suppose Toastersoft asked you to promise not to try to fix the toaster on your own, instead offering to sell you advice at $35 a pop. Your contract also stipulated that once you bought it, the toaster could not be sold, lent, or given away to anyone, nor could you complain publicly about any problems. Plus, Toastersoft might have conveniently neglected to disclose these rules until after making sure you'd paid for--and couldn't return--the item.

Would you do business with anyone under those terms? You probably already have: That's the way many companies sell their software today. Although few software companies include all of these provisions in one end-user license agreement (EULA), each condition of sale or use has appeared in some kind of software license. Simply by installing a new piece of software, you could be agreeing to many of these stipulations. In the case of freeware and shareware, in particular, installing the program may mean installing a piece of adware or spyware--a compelling reason to read the EULA.

Granted, it's unlikely that some software company is going to sue you for tinkering with its code or griping to a coworker about its product. But if installing the software obligates you not to do these things, don't you want to know about it? That's why it's important to understand what's in those EULAs we accept--and to let companies know if we don't like their terms. All the while, a battle rages behind the scenes: The software industry is pushing legislation to freeze your rights, and consumers are fighting back to reform the license agreement situation.

Your Rights Today

Companies do tell you about these rules. In fact, they spell them out in mind-numbing detail in their EULAs--those 46 screens of solid gray text you scroll through to reach the "I Agree" button.

EULAs vary considerably from company to company and from product to product. According to Microsoft's Windows XP EULA, for example, the company isn't responsible if the software wreaks havoc with your PC, even if Microsoft knew in advance about the problems. And Autodesk's EULA for its AutoCAD program says that if you file for bankruptcy, you lose your license to the software.

You do read your agreements, don't you? Sure you do. Right after you visit the courthouse to volunteer for jury duty and finish brushing your dog's teeth.

The problem isn't just that the devilish details are buried in lines and lines of impenetrable legalese. Sometimes you can't even see the EULA until after you have opened the shrink-wrapped box and nearly finished installing the software.

Companies' Free-for-All

How do vendors get away with setting such skewed rules? Simple: because they can. Since federal legislation designed to govern transactions on digital products doesn't yet exist, vendors call the shots.

And the software industry wants things to stay that way. In 2000, the proposed Uniform Computer Information Transactions Act was introduced). Backed almost exclusively by software companies (including Microsoft and AOL) and industry groups, UCITA attempts to establish a national standard for the contracts used in the sale of digital information. Its proponents argue that it will keep costs down for consumers.

One UCITA opponent, Ed Foster of Gripelog, a consumer advocacy site, sardonically describes the bill as a "freedom of contract": Basically, the software vendors can get away with whatever they want, as long as they mention it in the EULA.

UCITA has been opposed by at least 32 state attorneys general, the Federal Trade Commission, and virtually every consumer advocacy group that has studied it. It has even spawned several anti-UCITA organizations, including Americans for Fair Electronic Commerce Transactions (AFFECT). To date, state laws based on the UCITA model have passed in only two states--Maryland and Virginia--and few lawmakers expect it to be enacted elsewhere anytime soon.

Most experts consider UCITA to be all but dead, but it could be a sleeping giant. Miriam Nisbet, legislative counsel for the American Library Association and president of AFFECT, explains, "All it would take is for someone, perhaps with [a vested] interest in the software industry, to present it [again], arguing that legislation covering digital products is long overdue."

Think Before You Click

How can you protect your rights when buying software? Start by being informed. AFFECT has launched a campaign called Stop Before You Click. The program promotes what it calls the 12 Principles for Fair Commerce in Software and Other Digital Products. Ultimately, AFFECT's goal is not only to raise consumer awareness of unfair user terms, but also to help develop better laws.

So to avoid the pitfalls that EULAs present, before you buy a given product, try to shop around for the most consumer-friendly agreement: Check the companies' Web sites and read the associated EULAs, if available (Adobe and Symantec, for example, post EULAs prominently on their sites). Also, once you have the product in hand, you must read those license agreements closely. For instance, look for an "automatic renewal" clause: You sign up to try out a piece of software, and the next thing you know, you're being billed regularly for it--a provision that was buried in the agreement.

If you'd rather disable your spam filter for a week than slog through an entire EULA, try to target the most important points, as outlined in AFFECT's 12 Principles. Also, the Electronic Frontier Foundation's Web site includes a guide to dangerous terms found in EULAs. Sites like Bad Software and Ed Foster's above-mentioned Gripelog offer EULA reviews and forums, legal analysis, and legislative updates, as well as opportunities to get involved and help others understand EULA issues.

When it comes to software products, we all want better protection. But fair legislation will happen only when we consumers become more assertive about what we will and won't accept. After all, you can return a flaky toaster without any major hassles--why not flaky software?

Anne Kandra is a contributing editor, Andrew Brandt is a senior associate editor, and Stephanie Layton is an editorial assistant for PC World. You can send them e-mail at To read previously published Consumer Watch, Privacy Watch, or On Your Side columns, click here, here, or here, respectively.
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