Reconceptualizing Consumer Terms of Use for a Globalized Knowledge Economy

Abstract

U.S.-style terms of use (“TOU”) are “take it or leave it” waivers, masquerading in the clothing of contract and divesting consumers of important procedural and substantive rights. As U.S.-based software publishers and platforms go global, the one-sided TOU agreements they employ will increasingly be under scrutiny in European Union (EU) countries and other nations with radically different legal traditions. Thus, U.S. companies need to pay close attention to the EU’s mandatory consumer provisions governing their agreements, and perhaps even adopt a minimum floor for consumer rights as they intersect with TOUs. The following argument for reconceptualizing consumer TOUs — so that they afford consumers minimum adequate rights and remedies — unfolds in four parts. Part I explains how TOUs have evolved from shrinkwrap massmarket licenses to clickwrap, browsewrap, and other methods. Parts II and III demonstrate that European Union regulations offer mandatory procedural and substantive rights for consumers. Part IV examines ten problems with TOUs and proposes that these troublesome practices be reformed so that companies will be able to safely export consumer information products.