Amazon, EULAs, and Orwell’s memory hole.

Can Amazon take back from y0ur Kindle a book you thought you’d purchased? Well, it did exactly that — Kindle owners who’d obtained ebooks of George Orwell’s 1984 and Animal Farm discovered last week that Amazon had simply deleted those books from their Kindles. No one seems to have known Amazon could do that — the fact the Kindle connects electronically to the internet has until now always been considered a reason the Kindle is better than competing ebook readers.

But did Amazon have the contractual right to do what it did?

The first thing to note is that you don’t “buy” ebooks from Amazon. As the Kindle’s End User License Agreement (“EULA”) states, you merely purchase a “license” to use the ebooks. The license is the right to use the ebooks under the terms of the EULA.

But does the EULA allow Amazon to unilaterally take back a book? I’m not so sure. I think likely Amazon is in breach. Nowhere in the agreement do I see any provision that gives Amazon the right to do what it did. Moroever, the EULA states that the license is one to keep a “permanent” copy of the text you are obtaining and to view, use, and display that text an “unlimited number of times”:

Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times.

The fact Amazon refunded the price of the Orwell books would not excuse its breach. You can’t enter a contract and then unilaterally tell the other side to the deal you want to undo it.

So Amazon may indeed be in breach. But does it matter? First, it would be difficult to prove any damage over and above the “purchase” price, which Amazon has refunded. But there are two more important points. First, as I’ve written before about EULAs, anytime you enter one online you are probably agreeing that the agreement can be amended at any time without even any notice to you. Amazon may simply argue that its recall of the books was an amendment of the agreement.

Second, what are you going to do, sue? You can’t. The EULA requires any dispute arising under it to be arbitrated in Seatlle! Are you going to go to the trouble of hiring a lawyer in Seattle to start an arbitration proceeding so that you might be able to recover a few more bucks? Of course not.

Actions like these are why class actions exist — where a company engages in actions that cause small amounts of damage to many people, it’s not worth any individual’s time or money to pursue a remedy, and even if it were the remedy is so small that the company’s gains from the improper conduct are worth it. As Wikipedia explains:

[A] class action may overcome “the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 388, 344 (7th Cir. 1997)). “A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.” Amchem Prods., Inc., 521 U.S. at 617 (quoting Mace, 109 F.3d at 344). In other words, a class action ensures that a defendant who engages in widespread harm – but does so minimally against each individual plaintiff – must compensate those individuals for their injuries. For example, thousands of shareholders of a public company may have losses too small to justify separate lawsuits, but a class action can be brought efficiently on behalf of all shareholders. Perhaps even more important than compensation is that class treatment of claims may be the only way to impose the costs of wrongdoing on the wrongdoer, thus deterring future wrongdoing.

But you can’t bring a class action in arbitration. That’s why all these EULAs require arbitration — so that there’s no opportunity for a class action that would impose on the company the real damages it would be liable for to all the people it has wronged by its conduct.

Pretty clever, eh? Just remember, when you push for “tort reform,” you’re really looking to benefit wrongdoers, not to right the defects of a “broken” litigation system.

ADDENDUM: Maybe there is hope after all – in Harris v. Blockbuster, a federal district court in Texas ruling under Texas state law refused to enforce an arbitration provision precisely because the contract provided a unilateral right to amend. I’ve got to research this point more, but it seems on its face to be consistent with Texas law. I see reason, though, to think it wouldn’t be under the law of many states. The court says the agreement to arbitrate is “illusory” because it can be amended without notice. I would think that in most states the un-amended contract would be enforceable and terms that were added by amendment MIGHT be deemed illusory.

I dont know how to tell you all just how crazy this life feels

From MSNBC:

John McCain may have lost the presidential election to Barack Obama, but his campaign seems absolutely determined not to lose to Jackson Browne. The singer/songwriter sued McCain in August after the Republican candidate for the highest office in the land used his song, “Running on Empty,” in a campaign commercial that targeted Obama’s energy plan. . . .

McCain, of course, is arguing that his use of the song was fair use, not copyright infringement (hyperlinks added):

The campaign’s fair use reading is based on the application of the standard four-factor test that includes the purpose and character of the use of the song (McCain argues it was non-commercial and transformative); the nature of the work (McCain derides the song as old, old, old, with a title that’s an acknowledged cliche); the amount and substantiality of the use of the song (McCain only used the title phrase, and cites a recent judgment against Yoko Ono, who had sought to prevent the unauthorized use of John Lennon’s “Imagine” in a film); and the effect of the use of the song (McCain says that rather than damage the song’s commercial potential, his use “will likely increase the popularity of this thirty year-old song”).

In some ways, the case is reminiscent of Master Card v. Nader 2000 Campaign Committee, in which the court dismissed Mastercard’s lawsuit against Ralph Nader’s 2000 Presidential Campaign Committee. Mastercard’s lawsuit alleged, among other things, that a Nader campaign add that borrowed heavily from Mastercard’s “priceless moments” television ads infringed on Mastercard’s copyright in those ads. The court concluded:

The Nader Ad does add something new and qualifies as a “transformative” work. Whether it “comments” on the original is the issue in question. MasterCard’s message depicted in its Priceless Advertisements is very plain and straightforward. In a series of advertisements, MasterCard presents various intangible moments that are highly valuable, yet unable to be “purchased” or are “priceless.” Hence, “there are some things that money can’t buy.”

This idea is followed by the message, that the viewer-consumer can purchase everything else with their MasterCard credit card–”for everything else, there’s MasterCard.” Ralph Nader’s Political Ad attempts to show various ways different Presidential candidates can be bought in the “big-money arena of Presidential politics” and contrasts the “priceless” truth represented by Ralph Nader as the remedy for the bought and paid for positions of others. Through this depiction, Ralph Nader argues that he not only sends across his own message, but that he wittingly comments on the craft of the original, “which cloaks its materialistic message in warm, sugar-coated imagery that purports to elevate intangible values over the monetary values it in fact hawks.” This commentary “may reasonably be perceived.” The message need not be popular nor agreed with. It may be subtle rather than obvious. It need only be reasonably perceived. Ralph Nader’s Political Ad is sufficiently a parody for the purposes of a fair use analysis, and consequently, is transformative.

William Patry, Google’s Senior Copyright Counsel, opines on typically futile efforts to use copyright to quell political speech here. There is a long history of this type of thing, as I’ve mentioned here and as you can see in the videos below, none of which was successfully blocked by the owners of the copyrighted works being used: