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.

Do you know you’ve agreed that Amazon can decide you’ve agreed to something other than what you agreed to?

I teach contract law. One of the most interesting issues in contract law is the extent to which it is based on conscious agreement. Theoretically, two free individuals are at liberty to agree to govern their relationship with respect to any given matter (the sale of a car, the division of assets in a divorce, the employment by one of another, the limitations on the use of materials posted by one on a web site governed by another) in any way they agree.

One problem with this theory is that so few of our contractual relationships are based on anything resembling conscious agreement. When is the last time you read a rental car agreement? The agreement governing use of your credit card? (Well, we might all be doing that more these days.) The terms of service governing your Facebook account?

The vast majority of us never read the terms of service governing our use of commercial web sites. Yet there is little question we are bound to them and that we entrust them with our creative work and our information we want to keep private. More surprisingly, perhaps, when we agree to these terms of service we almost always agree that the service provider can change the terms unilaterally. In other words, we are agreeing that our relationship with the web site will be whatever the web site decides that relationship will be.

As Plagiarism Today explains:

[I]t is standard practice for many sites to silently change their terms of service as the terms itself allow them to do. Users are often unaware of potentially worrisome changes until after a problem has arisen, when it is often too late to do anything about them.

But now the Electronic Frontier Foundation has created “‘TOSBack‘”: a ‘terms of service’” tracker for Facebook, Google, eBay, and other major websites”:

At www.TOSBack.org, you can see a real-time feed of changes and updates to more than three dozen polices from the Internet’s most popular online services. Clicking on an update brings you to a side-by-side before-and-after comparison, highlighting what has been removed from the policy and what has been added. . . .

“Some changes to terms of service are good for consumers, and some are bad,” said EFF Senior Staff Attorney Fred von Lohmann. “But Internet users are increasingly trusting websites with everything from their photos to their ‘friends lists’ to their calendar — and sometimes even their medical information. TOSBack will help consumers flag changes in the websites they use every day and trust with their personal information.”

Art exposing law: Pirates of the Amazon

Here’s some art trying to express the tensions between technology allowing the instant worldwide dissemination of a work and the law that evolved to deal with an entirely different set of technologies. DailyTech reported that a Firefox plug-in named “Pirates of the Amazon had been developed that allowed its users to immediately identify free alternative online sources for any product they found on the Amazon.com website. Within a day, Amazon’s lawyers had filed a takedown notice. Subsequently, someone put up a website stating that the plug-in had been created as an art project meant to illuminate issues raised by today’s “media culture”:

“Pirates of the Amazon” was an artistic parody, part of our media research and education at the Media Design M.A. course at the Piet Zwart Institute of the Willem de Kooning Academy Hogeschool Rotterdam, the Netherlands. It was a practical experiment on interface design, information access and currently debated issues in media culture. We were surprised by the attentions and the strong reactions this project received. Ultimately, the value of the project lies in these reactions. It is a ready-made and social sculpture of contemporary internet user culture.

One day after publishing we received a take down request by the legal department of Amazon.com.

This work was made as a trimester assignment in our study course, under the supervision of our tutor Denis Jaromil Rojo and our course director Florian Cramer. This page is now the documentation of our study work as required by the course.

To further confuse matters, DSLReports.com wonders if the claim the plug-in was an art project was “simply a post-release attempt by the plugin’s author to cover his legal posterior.” I would suspect, though, that the project really was an art school endeavor. Denis “Jaromil” Rojo “is an artist and a FOSS hacker. . . . popularly known for Dyne:Bolic (http://www.dynebolic.org/), a Live CD distribution . . . . As a programmer, he is author of several free software that present new possibilities for online radios. Jaromil is identified as a “tutor” for the 2008-09 academic year on the Piet Zwart Institute’s web site, and Florian Cramer is identified on the same site as the “course director of the Media Design M.A. programme.”

ADDENDUM: Florian Cramer writes in the comments to thank me for the “balanced” coverage and to add that the indication the site was an art project was made clear on Pirates of the Amazon from the beginning.

Representing clients in a changing world

This item, from Techdirt, should give some pause to lawyers who represent copyright holders: the top selling MP3 download on Amazon last year was Nine Inch Nails’ Ghosts I-IV album.  As Techdirt explains, this means, “[i]n other words, you could go on pretty much any file sharing system out there and legally download the music for personal use… and yet it was still the top selling downloadable album (this is on top of all the money earned by Reznor’s other business models associated with this album).”

A lawyer’s job is to represent the best interests of his client.  It may well be that the best interests of copyright holders in an environment where digital information can instantly be duplicated and instantly be disseminated world-wide is to find new business models, not to persist in the 20th Century habit of filing infringement lawsuits.  It seems silly, for example, (as IP Watchdog points out) for Gatehouse Media to be suing “the New York Times alleging copyright infringement by the New York Times because one of the papers owned by the Time, namely the Boston Globe, was linking to original articles owned by Gatehouse Media.”  Gatehouse’s allegations of infringement are based on the fact that the links, though they provide attribution to Gatehouse, are “deep links” — that is, they are links to the articles themselves that, therefore, bypass Gatehouse’s homepage (and, presumably, the advertising on the home page).

The court in Ticketmaster Corp. v. Tickets.Com, Inc., No. 99-07654 (CD Calif. Mar. 27, 2000)(pdf), found that deep linking was permissible. Tickets.com had provided deep links to pages on Ticketmasterrs website to guide readers precisely to the spot the could purchase tickets for specific shows. Ticketmaster wanted readers and customers to come through Ticketmaster’s homepage. The Court stated:

The customer is automatically transferred to the particular genuine webpage of the original author. There is no deception in what is happening. This is analogous to using a library’s card index to get reference to particular items, albeit faster and more efficiently.

The court concluded the deep links provide by Tickets.com did not constitute copyright infringement. Nevertheless, other deep linking cases (discussed by Gayle Campbell and Patty Steib here) make clear that the legality of the practice (like so much in copyright law) has not been finally determined.

But Gatehouse Media’s lawsuit seems intended to stop a practice that can only benefit Gatehouse Media by bringing more traffic to its site.  And what good are links if, for example, I left you wandering through a webiste trying to find the right page rather than sending you straight to it?

For some lawyers, unfortunately, a right is only something to be vindicated, not just one factor among many that need to be taken into account in seeking the client’s best interests.