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Consumer group claims software licences are unfair

Software licences are obscure, unbalanced and unfair, according to the National Consumer Council (NCC), which has filed a complaint with the Office of Fair Trading (OFT). It wants the OFT to force software publishers to use clearer licences.25 Feb 2008

The NCC says that consumers are stripped of their rights by overly-legal licences that they cannot understand, and has called for licences to be written in plain English, in line with OFT guidelines.

The NCC bought 25 software products and found problems with the licences in 17 of them. It has referred these for investigation by the OFT to find out if they breach consumer legislation that demands that contracts be fair.

It said that problems include a lack of notice that users will even have to sign an end user licence agreement (EULA), and the fact that they do not have a chance to review it before purchasing software.

"Plugging the gaps in consumer legislation is a vital move," said Carl Belgrove, senior policy advocate at the NCC. "Consumers can't have a clue what they're signing up to when some terms and conditions run to 10 or more pages. There's a significant imbalance between the rights of the consumer and the rights of the holder."

Belgrove told technology law podcast OUT-LAW Radio that it is not fair that licences can only be viewed after the purchase of software.

But IT law specialist John Salmon of Pinsent Masons, the law firm behind OUT-LAW.COM, said that this has been industry standard practice for years and was now accepted by the courts.

"There have been cases both in the UK and the US, and the judges in those have been very pragmatic, have said this is industry practice, this is what happens, this is a practical way of dealing with a legal situation," said Salmon.

The NCC criticised software publishers for highlighting in the licences only those parts of the law which benefit them and not those that benefit customers. It said that the terms of contracts were potentially unfair.

Belgrove told OUT-LAW Radio that he believed that consumers were particularly at risk because normal consumer protection does not apply to software.

Salmon and Pinsent Masons litigation specialist David Woods contested that. They said that while it may be the case that the Sale of Goods Act does not apply to downloaded software, it does apply to physically purchased software. They also said that laws about unfair contract terms still applied to all software bought by consumers.

The NCC said that it hoped its campaign would result in software publishers changing their licences and the European Commission making amendments to consumer protection laws.