Federal Trade Commission to target EULAs

There have been quite a few examples of the Federal Trade Commission  in action over the past few months.  Behavioral Advertising, Digital Rights Management, assisting state consumer protection and numerous other statutes all relate to the Federal Trade Commission’s job of protecting consumers.  Since 1983, the FTC has made it quite clear of their policy on deceptive acts.

One item receiving only cursory treatment: End User License Agreements (EULAs).  At the initial peak of the Peer-to-peer file sharing in 2004, the FTC solicited input from industry through one of their workshops.  Several points brought up during that conference surrounded EULAs and how file sharing products such as eDonkey and Gnutella included quite extensive licenses.  This resulted in recommendations such as search-ability and slide bars to avoid hiding potential monitoring or questionable privacy practices within agreement.  In the FTC’s Guidance for Dot Com Disclosures the name of the game is visibility :

Making the disclosure available somewhere in the ad so that consumers who are looking for the information might find it doesn’t meet the clear and conspicuous standard.

This could easily carry over to the EULA.  It has been recently speculated by those in the gaming industry that the FTC could place begin regulating licenses.  Apparently, even though most software and service providers are legitimately creating the agreements without deceptive intent, they are difficult to understand for the typical consumer.  Then there are those that simply aren’t cooperating.  Is it time to limit the “legal-ese” and construct simple, plain language agreements?


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