Online Terms - What Works, What Doesn’t

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The online fine print - those terms and conditions that you agree to when you buy something online - it really does matter where those terms are placed in the checkout process. A recent US case illustrates this point. In Tompkins v. 23andMe, Inc., 2014 WL 2903752 (N.D. Cal. June 25, 2014), the court dealt with an online checkout process for DNA testing kits sold by 23andMe. When completing a purchase, customers were not presented with any mandatory click-through screen for the transaction to complete. There was a passive link at the footer of the transaction page, something the court dismissed as a “browsewrap”, which was ineffective to bind the customers. In other words, the Terms of Service were not effective at that point in the transaction.

In order to obtain test results, however, customers were obliged to register and create an account with 23andMe. In this (post-sale) registration process, a mandatory click-through screen was presented to customers, not once but twice. The court decided that this second step was valid to bind the customers who purchased the DNA testing kits.

While this shows that courts can take a position that is sympathetic to online retailers, this should not be taken as an endorsement of this contracting process. In my view, the better approach would be to push customers through a mandatory click-through screen at both stages. This is particularly so in a case like 23andMe, where the first transaction is for sale of a product (the kit) and the second step relates to a service (processing test results). The two, of course, are intertwined, but the double click-through reduces risk and plugs the holes left by the single click-through. For example, a customer may buy a kit and never create an account, or use a kit without have purchased it. As the court notes: “it is possible for a customer to buy a DNA kit, for example, as a gift for someone else, so that the purchasing customer never needs to create an account or register the kit, and thus is never asked to acknowledge the TOS.”

We can speculate on why the click-through appeared at the second account-creation step, and not the first kit-purchasing step. Sometimes, the purchasing process is modified over time due to changes in marketing or sales strategies. Perhaps the company broke a unified transaction process, which ended with account-creation, into two separate steps after market research or customer feedback. When something like this happens, it is important to repeat the legal review, to ensure compliance with e-commerce best practices.

 

Topics:  Internet Retailers, Online Payments, Retailers, Terms and Conditions, Terms of Service

Published In: General Business Updates, Communications & Media Updates, Science, Computers & Technology Updates

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.

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