Changing Online Terms Midstream

more+
less-

Cloud service providers often want to change online terms in the middle of the product lifecycle. Amendments are typically required due to changes in the law or changes in product functionality. For example, Apple’s introduction of its iCloud service triggered changes to the iTunes terms of use. If users want access to the new functionality, they must assent to the revised terms. It amounts to a midstream unilateral change to the contract. Do these changes hold up in court? Two recent US cases suggest there is a valid way to effect such changes:

  • In Fineman v. Sony Network Entertainment (N.D. Cal.; Feb. 9, 2012), consumers objected to Sony’s amendments to the online terms governing the Sony PlayStation Network. The changes were challenged and ultimately upheld in court. 
  • In Lebowitz v. Dow Jones & Co., 06 Civ. 2198 (MGC) (S.D.N.Y.; Mar. 12, 2012), a New York court permitted unilateral changes to the terms and pricing for the WSJ Online subscription service. This turned, in part, on the terms of the original contract, which permitted the vendor to make reasonable changes to the terms as long as notice was provided to the user. For further discussion, see Eric Goldman’s post.)
  • In Canada, this issue was addressed in the leading case of Kanitz v. Rogers Cable Inc., 2002 CanLII 49415 (ON SC), in which a Canadian court upheld a change in the online terms imposed on Rogers internet customers.

Note: software vendors and cloud service providers need to be cautious about forcing users to waive class-action rights. Such amendments can conflict with local consumer-protection laws. Unilateral changes need to be managed carefully. Get advice before you attempt to impose unilateral changes to ensure the best outcome.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Field Law | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×