Changing Positions

A Short History of Online Terms of Service

I’ve recently undertaken a daunting task: reviewing and summarizing the public-facing agreements from hundreds of leading websites. Often referred to as “Terms of Service” (or ToS, or Terms of Use), these are the online agreements that bind end users of websites, mobile applications, and other online services.

Looking over all these Terms of Service has me thinking about how we got here.

The Big Bang

Back when the Web first went mainstream in the mid-1990's, popular websites knew that they needed some kind of end user agreement. At the time, consumer end user license agreements were common for off-the-shelf software. The software business had established a strong legal presumption that passive consumer agreements (so-called “shinkwrap agreements”) were enforceable—even where the end user hasn’t so much as clicked “I Agree”, let alone signed a contract. By the mid-1990's, it seemed obvious that websites would adopt a similarly passive licensing model.

Initially, websites published fairly simple license agreements that focused almost entirely on protecting their intellectual property. These basic IP terms were sufficient for the first few years of the Web’s rise.

Deep-Linking and Framing

By 1996, two of the Web’s most powerful features—the ability to link from any page to another, and the ability to frame content of one page within another—were beginning to attract the wrong kind of attention. Some users claimed confusion about who operated the sites they were visiting. As fears of liability grew, so did Terms of Service. Now, every site had to include a provision disclaiming responsibility for “links to third party content”. Many sites began including (annoying) interstitial disclaimers to clarify the boundaries of their web sites, and framing of content began to fall out of favor.

Data Protection and Privacy

During the last half of the 1990's, regulators like the FTC, state attorneys general, the European Union, and others began to take a serious interest in protecting consumer rights online. A series of rules, guidelines and laws aimed at protecting personal information emerged. Sites began to publish privacy policies. Their terms dealing with eligibility of minors and foreign users to register accounts became more strict.

User-Generated Content

Around the turn of the millennium, sites based on user-generated content became more prevalent and concerns grew that site operators would be held responsible for hosting objectionable, illegal, or infringing materials.

Lawyers scrambled to anticipate and disclaim the possible liabilities. Do sites have to monitor what their users post? Who owns user-generated content? How can sites ensure that their users aren’t infringing intellectual property? How can sites ensure that users haven’t run afoul of other legal rules, such as defamation or securities laws? What rights to sites have to reuse user-generated content? What rights do users have to recover the content they’ve posted to the site?

The issues of liability for user content are complex. Lawyers are still refining their approach to all of the questions above. We’ve seen plenty of examples of overreaching by lawyers in this area leading to disastrous public relations flare-ups.

The Present and Future

Surprisingly little about the standard website Terms of Service template has changed over the past ten years. The industry seems to have settled into “tinkering” mode, adding a mandatory arbitration provision here, a waiver of class action rights there, etc. Overall, websites seem to have reached an acceptable level of comfort in their passive online terms.

The next frontier for Terms of Service is, not surprisingly, mobile and wearable devices. Mobile and wearable apps and devices present the first significant shift in potential risks and liabilities since the early 2000's, and lawyers are only beginning to formulate the language to address them.

Footnote on Enforceability

Are Terms of Service even enforceable? It’s a very valid question, and one with plenty of room for debate. More on this topic soon…