National Consumer Council calls for OFT investigation on software licenses
Introduction
The National Consumer Council has claimed that many of the standard terms used by software providers in their licenses are unfair and fail to comply with UK consumer protection law, and has called on the Office of Fair Trading to investigate.
In the report which it has just published ("whose license is it anyway – a study of end user license agreements for computer software"), the license terms which the NCC criticises include terms using complex legal jargon which consumers cannot be expected to understand, terms reserving rights for the software provider to remove services, and terms containing excessive exclusions of liability. These clauses were all looked at by the NCC in a survey of twenty-five popular consumer products - among these anti-virus, office productivity, games, and educational software.
The OFT has not yet said whether it will take any action, but the NCC says that Ofcom, which regulates mobile phone contracts, has already found similar terms in some mobile phone contracts unfair, and in each case the operator has amended them.
The NCC has also criticised the use by software providers of clauses which acknowledge that the application of some of the terms in the license may be affected by, subject to, or prohibited by the relevant laws. It sees this as the software provider relying on the use of license terms which force the consumer to prove that other terms in the license are unfair. It is fair to say that software providers cannot expect to rely on these terms to protect them from challenges, even though their use is a fairly common strategy for software providers who operate internationally (particularly those who do business in the UK but are headquartered elsewhere).
The NCC's demand for action may raise awareness not only of the types of terms software providers use, but also of the fact that the OFT is able to take legal action against software providers to prevent the use of unfair terms. It is possible that this could result in more requests being made of the OFT to review licenses. Given this prospect, now might be a good time for software providers to take another look at the licenses which they use for their consumer products.
Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.
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