“We Can Change These Terms at Anytime”: The Detritus of Terms of Service Agreements

The online Terms of Service/Use ecosystem is a difficult one to live in.

Companies still think that they can unilaterally change their terms of service agreement without providing any notice of the changes to the users. Why do big companies think they can get away with this? A lot of it has to do with what’s become industry-standard contracting drafting language. If you've looked at ToS before, this language will look familiar:

We may, at any time, and at our sole discretion, modify these Terms and Conditions of Use, including our Privacy Policy, with or without notice to the User. Any such modification will be effective immediately upon public posting. Your continued use of our Service and this Site following any such modification constitutes your acceptance of these modified Terms.

Now, there’s a lot to argue about with respect to the actual, substantive content of a terms of service agreement. But the sample clause above brings us to a much more basic, procedural problem: can a company or service change its terms of service and not provide notice to its users about those changes?

This questions brings us to Rodman v. Safeway, Inc., an interesting case out of the Northern District of California. Long story short, the plaintiff alleged that Safeway charged higher prices for items ordered on its online store than purchased in-store. Naturally, the case then focused on whether or not Safeway’s online terms of service promised the same prices online as in-store. Mid-case, Safeway unilaterally amended its terms of service to clarify that the prices in its online store were not necessarily the same prices as in-store.

The problem? Safeway never notified its users of this change.

Safeway’s “Changes to Special Terms” Policy

Here’s the Court describing the process Safeway would have created for assent online:

Safeway contends that, because Class Members read the initial registration contract, every time they opted to go forward with an online purchase after registration, they were on notice that they were assenting to a new contractual agreement, governed by the Special Terms operative elsewhere on the website at the time of that purchase.

Basically, this logic creates two-tiered system of online contract making. In the first instance, a clickwrap agreement (clicking “OK” or “I agree”) is used to bind the user. But, in the second instance, after a modification to the first agreement, a browsewrap agreement (continued use=assent/agreement to the new terms) is used to bind the user. The Court, thankfully, doesn’t look too kindly upon this new contractual arrangement, arguing that it creates the expectation for “consumers to spend time inspecting a contract they have no reason to believe has been changed” and that “the imposition of such an onerous requirement on consumers would be particularly lopsided.”

The Court put the situation pretty simply: “The safeway.com agreement did not give Safeway the power to bind its customers to unknown future contract terms, because consumers cannot assent to terms that do not yet exist. A user confronting a contract in which she purports to agree to terms in whatever form they may appear in the future cannot know to what she is are agreeing.”

The funny thing is, though, despite the Court’s reasoning (that users cannot assent to terms that do not yet exist), and the reasoning of other Courts (see: the Ninth Circuit in 2006 in Douglas v. Talk America and the Northern District of Texas in 2009 in Harris v. Blockbuster, Inc.), the amend-at-will-without-notice clauses are still very much part of the terms of service ecosystem.

Look: we need to have a serious debate about the substantive issues of what rights you’re surrendering away in terms of service agreements. But, I don’t think we can get to the various debates of “how do you treat a user’s data,” “what type of license do you give to third-parties, if any,” and “what is your duty to disclose when the government seeks information about a user” without finally solving the procedural debate first.

What’s the point of having a debate about the substance of a terms of service agreement if the company could unilaterally, without notice, change those terms? That’s a tough pill to swallow.

This kind of language is incredibly common across online retailers — and by common, I mean it’s the industry standard. Here’s a brief overview of the online mega-retailers:

Best Buy’s amend-at-will provision.
Walmart’s amend-at-will provision
Target’s amend-at-will provision

As the Ninth Circuit held in Nguyen, “[T]he onus must be on website owners to put users on notice of the terms to which they wish to bind consumers.” Clearly, that logic has yet to fully infiltrate the legal ecosystem in which amend-at-will provisions still thrive.

To a lesser extent, this problem also exists with other platforms and services. Let’s take a look at the policies of Medium and Twitter.

Medium’s amendment policy
Twitter’s amendment policy

Now, to be completely clear, these terms are completely distinct from the logic of “we can amend this agreement at anytime without notifying you.” In the example of a Twitter or a Medium, either service will actually provide you notice of changes to the agreement — which is great! The problem, again, is that’s not mandatory. For both Twitter and Medium, you’ll only receive notice if the services deem the changes to be material.

Now, I’m not debating whether Medium or Twitter would fail to give notice with respect to certain “material” changes — such as a change in a “right to content” policy or licensing to third-parties policy. (We all remember the kerfuffle that was Instagram changing its terms of service until it wasn’t.) And for full-disclosure, I’m pretty jazzed by most of the policies in Medium’s ToS (see: HTTPS by default, an affirmative policy to disclose to you when they’ll release information about you, clear rights of ownership to content, etc.).

But the fundamental question is: who gets decide what is or isn’t material? In the Safeway example, we could easily infer that the company wouldn’t have thought its changes (to clearly spell out that its online store prices didn’t reflect actual in-store prices) were material.

That frames the issue in more ideological terms (online user rights).

But what about a more practical framing?

How often does a service or company amend its terms of service? Not too often! Since it’s creation, Twitter has updated its ToS eight times — basically once or twice a year. The same relative infrequence is true for Medium, too. (Which makes sense! Amending terms of service agreements doesn't sound like a bundle of joy to anyone, really.)

So why not just make notice of any changes an embedded requirement? That doesn't seem entirely unreasonable.

The positives — establishing and fortifying the building blocks of a legal ecosystem that respects users — seem to outweigh the potential negatives — propping up a small notice of changes at the top of the website, quickly summarizing the changes in a blog post, and establishing a notice period.

“For one thing, we want your feedback and suggestions on how to make our service better.”

That’s what Medium’s terms of service agreement says, at least.

I might be incredibly naive here, but I do think this is an important conversation to have.

So, here’s my suggestion: create an affirmative obligation to provide users with notice of any changes to the terms of service agreement. It might be a small step, but it’s one that could certainly have a ripple effect. Tackling the problem of procedural power disparities in the formation of online contracts and terms of service agreements allows us to focus on the bigger issue: the actual, substantive policies in the terms of service.

At the end of the day, the average user’s understanding of and expectations for what they are signing up for should matter. At bare minimum, that should mean knowing when the terms change, even in the slightest.

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