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If You “Like” Us You Can’t Sue Us: Hidden Traps in User Agreements

by Alex Lipton, Legal Researcher at Shake

If You “Like” Us You Can’t Sue Us: Hidden Traps in User Agreements

You skip over them all the time, those electronic hurdles standing between you and your favorite websites and apps: user agreements.

Whether they’re privacy policies, terms of use, or licensing agreements, odds are you’re not fully reading through them before you click “Accept” or use the site or service. And who can blame you? These user agreements are usually long, dense and packed with legalese. In fact, one study found it would take 30 days to read all of the privacy policies you encounter in a year!

That said, those agreements can contain some surprising traps. Here are asome examples that have come to light recently.

If you “like” us, you can’t sue us.

General Mills recently came under fire for a clause in their terms of use that mandated arbitration (meaning that you can’t sue the company in court) for anyone who joined one of General Mills’ “online communities.” The language read:

“In exchange for the benefits, discounts, content, features, services, or other offerings that you receive or have access to by using our websites, joining our sites as a member, joining our online community, subscribing to our email newsletters, downloading or printing a digital coupon, entering a sweepstakes or contest, redeeming a promotional offer, or otherwise participating in any other General Mills offering, you are agreeing to these terms.” (emphasis added).

Some analysts read this to mean that anyone who  even “liked” the brand on Facebook would be subject to the terms. Less than a week later, General Mills reversed its position, removing not just the offending language but the entire mandatory arbitration clause. Though the company stated that at “no time was anyone ever precluded from suing us by…liking one of our Facebook pages,” the company (wisely) decided it was better just to end the controversy.

Your name and face will appear in advertisements and reviews on the Internet.

In 2012, Instagram updated its privacy policy to include the following notice about your username and photos: “To help us deliver interesting paid or sponsored content or promotions, you agree that a business may pay us to display your username, likeness, photos, in connection with paid or sponsored content or promotions, without any compensation to you.”

The privacy policy coincided with a huge drop in Instagram’s daily active users , leading some to believe that users were rebelling against the new policy. Instagram quickly clarified and updated its policy, striking the language.

Still, other companies have included similar clauses in their policies, including Google. Google’s current terms of service includes the following clause:

“If you have a Google Account, we may display your Profile name, Profile photo, and actions you take on Google or on third-party applications connected to your Google Account (such as +1’s, reviews you write and comments you post) in our Services, including displaying in ads and other commercial contexts. We will respect the choices you make to limit sharing or visibility settings in your Google Account. For example, you can choose your settings so your name and photo do not appear in an ad.”

Although Google says that you can “choose your settings,” the burden is on you — the policy requires you to opt-out if you do not want your name and photos to appear in commercial advertisements.

You agree that you will not write a negative review…or we’ll sue.

Though rare, companies have included terms in their policies that subject users to fines or liability when writing a negative review about the company. In 2008, a user who wrote a negative review on KlearGear.com received an email from the company stating that she had to pay a $3,500 fine if she did not take down the review. The company argued that the user accepted this policy when she agreed to the following term: “Your acceptance of this sales contract prohibits you from taking any action that negatively impacts KlearGear.com.” Though several analysts recognize that the $3,500 penalty would not be upheld in court , this does not stop some companies from including the language in their contracts and forcing users to resolve the dispute in court.

BONUS: If you read this term, we will send you $1,000.

Recognizing how rarely people read the fine print of user agreements, a company called PC Pitstop once buried a term that promised $1,000 to the first user who found the language and emailed the company. After 3,000 software downloads and more than four months, a user finally found the term and got the promised reward.

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We often tend to skim over long user agreements, but they are in fact legal contracts that bind you regardless of whether you actually read them. Remember that the next time you’re tempted to skip the reading!

Alex Lipton is a Legal Researcher at Shake and a Mitchell Jacobson J.D. Scholar at NYU School of Law. He also serves as Vice President of Operations for the InSITE Fellowship. His articles focus on legal issues affecting early-stage companies. Find him on LinkedIn or on Google+.