Articles Posted in Terms of Service

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HuluAs more and more content that has traditionally only been offered over-the-air, through cable, or on satellite becomes increasingly available via the internet, television content providers must take care in scrutinizing their existing broadcasting agreements to avoid potential conflicts with their current distribution affiliates. Although the internet offers content creators the ability to distribute media directly to their audiences, television networks will face a host of issues if they are not careful in structuring their approach to this new media paradigm.

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Worried about a company retaliating against you when you post a negative review on Yelp or TripAdvisor? Worry no longer because Congress has your back. Last week, Congress passed a law that will make it illegal for companies to retaliate against U.S. consumers who post negative reviews online.

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Pokemon-GO-logoAccording to the official Pokémon website, “kids all over the world have been discovering the enchanting world of Pokémon [for over 15 years].” Not surprisingly, many of us who used to be kids in the 15+ years are playing Pokémon Go, but who would have expected nearly 4 of every 5 Pokémon Go players (almost 80%) to be adults. Put into perspective—at Pokémon Go’s peak of 25 million daily active users, close to 20 million adults may have been playing the location-based augmented reality mobile game every day! Still, that also means at least one out of every five players are children, which in turn represents millions of daily active users against whom one or more provisions of Pokémon Go’s Terms of Service (TOS) might be unenforceable.

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TN-PokemonWe predicted last year that 2016 would be the year of Pokémon. This prophecy came true last week within just two days of the Pokémon Go launch. The location-based augmented reality mobile game/app quickly surpassed Tinder in daily users and neared Twitter’s totals (and as of yesterday, surpassed them), with its users spending twice as much time engaged with Pokémon Go relative to apps like Snapchat. This explosion has helped shares of Nintendo, partial owner of both the Pokémon Company and Niantic (which developed the game), grow over 50% in three trading days since the app’s launch. In the aftermath of the Pokémon takeover, it’s a good time to revisit some of the potential legal implications.

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Our recent posts on successful legal challenges to the arbitration clauses in browsewrap and clickwrap agreements have a theme in common—even the most thorough and well-worded agreement can be rendered unenforceable by website design. With this in mind, we have put together a list of otherwise innocuous web design components that can be the bane of both browsewrap and clickwrap alike. Note, failure to pay attention to any one of these will not necessarily render your agreement weightless—many of these are culprits only when grouped together—but they are also each eminently addressable, so why not avoid potential pitfalls in the first place?

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clickwrapWe previously covered the developing legal issues with browsewrap agreements and the importance of reviewing and updating any such agreement to ensure users are bound to the terms. In a browsewrap agreement, the user’s assent to the agreement’s terms is inferred from the user’s use of the website. Often, the terms of a browsewrap agreement are accessible from a hyperlink placed on one or more webpages of the company’s website. As we mentioned in our initial post, browsewrap agreements have a close, usually more dependable relative—the “clickwrap” agreement. A clickwrap agreement requires the user to click a button to affirm assent to the agreement’s terms. As a result of this direct, affirmative action, many lawyers view clickwrap as a safer alternative than its browsewrap cousin.

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Anyone who has purchased a product online or downloaded software for a computer, tablet or mobile device has likely encountered “browsewrap” and “clickwrap” agreements. Such agreements are the bread and butter of companies that sell or license products or provide services via websites or web applications. Clickwrap agreements require a user to affirmatively click a button to affirm his or her assent to the agreement’s terms, whereas with a browsewrap agreement, the user’s assent to the agreement’s terms is inferred from the user’s use of the website. (Often, the terms of a browsewrap agreement are accessible from a hyperlink placed on one or more webpages of the company’s website.)

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It’s no secret that the Consumer Financial Protection Bureau (CFPB) views arbitration agreements in contracts between financial services providers and consumers rather unfavorably. This antipathy has been maintained even after a 2011 Supreme Court decision (ATT Mobility LLC v. Concepcion) affirming the practice. Back in October, the bureau announced its consideration of a proposed rule that would prohibit this practice in some cases, and in other cases, require companies that use arbitration clauses to report information regarding claims filed and awards issued to the CFPB. On May 5th, the CFPB released the proposed rule.

In their client alert, Arbitration Provisions Mauled by Consumer Watchdog, colleagues Christine Scheuneman, Mercedes Tunstall, Amy Pierce and Andrew Caplan examine the rule in depth, pointing out some of its contradictions and areas in which the proposed rule may be susceptible to (the inevitable) legal challenges that will follow.

 

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A Chicago law firm has challenged Jay-Z and Kanye West, filing a class action complaint for violations of the California Business & Professions Code, fraudulent inducement and unjust enrichment in the Northern District of California. The complaint alleges that Tidal, a music streaming service owned by Shawn “Jay Z” Carter and Kanye West, was in financial straits earlier this year but that help arrived when Kanye West used his Tidalvaluable star power on Twitter to encourage his followers to subscribe to Tidal by tweeting that his highly anticipated new album The Life of Pablo would only be available on Tidal. Mr. West also tweeted that the “album will never never never be on Apple. And it will never be for sale… You can only get it on Tidal.” The complaint further alleges that subsequently “[n]ew subscriptions to the streaming platform skyrocketed, tripling its consumer base from 1 million to 3 million subscribers in just over a month.” All would have been well except that Mr. West made The Life of Pablo available through Apple Music, Spotify and his own online marketplace a month and a half after its initial release.

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Frequent readers of our blog will recall that in prior posts on companies such as Uber, Ashley Madison and Twitter, we have stressed the importance of having a robust terms of service (TOS) agreement. In many instances, TOS, if adeptly deployed, can limit a social media or gaming company’s liability to its users. We now see that TOS can also effectively limit the remedies available to these potential plaintiffs.
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