WARNING: The following commentary comes from someone without a legal degree. I’m not speaking to legalities, but to realities that writers (and readers, and other consumers) face when we click Agree on a Term of Service agreement with Amazon, PayPal, AT&T, or a when we purchase and install a piece of software.
Because the only choice is to agree to the terms or not use the service/software, most people don’t read the TOS. A TOS is usually couched in highly obscure legal language and if a consumer does bother to read it, she will end up with both a headache and vague feeling of impending doom when she (inevitably) clicks Agree.
A TOS, unlike a negotiated contract, is heavily weighted to protect the business entity. Very heavily. So heavily that some experts actually believe that most TOS agreements contain a sprinkling of unenforceable terms. These unenforceable terms are hidden among the many reasonable terms (no spamming — who but spammers object to that term?). Signing a TOS does actually feel like signing a contract with the devil, where you’re not quite sure that everything there is actually legal, but you know your soul is on the line.
The problem with a TOS term usually comes to light when a customer is inconvenienced. For Amazon, this was a huge deal back when they “vanished” George Orwell’s 1984 from customers’ Kindles when it became aware the publisher of the title did not hold the publishing rights. Amazon’s TOS allowed it to remove a book. In fact, it could be argued that Amazon was legally required to remove the books, although to do so without notifying customers of what had happened and why they were receiving a refund is highhanded. Customer outrage was such that Amazon pledged not to do so ever again.
Authors often also complain about price-matching by entities like Amazon, Sony, B&N and Kobo. TOS for all of these businesses reserve the right to price match with competitors. But the gray area comes in when they price match incorrectly — a book with a similar title but different contents; a price matched to a pirate site (where copies of books are provided illegally without the consent of the author); simple error. For some authors, this incorrect price matching is a real dollars and cents loss. But the TOS — heavily weighted toward the business — contains an out for that, too. The business generally reserves the right to correct its error and be held harmless from any incidental damages to the customer.
There is no recent controversy that underscores the growing problem of grabby TOS than that of the recent Paypal ultimatum to independent ebook sellers (Smashwords, All Romance Ebooks, Bookstrand, etc.) to take certain content off their sites or be banned from PayPal. This, interestingly, is what people fear Amazon will ultimately do — control who can publish anything at any given price. But it isn’t Amazon, a customer-driven business, that is making this move. It is PayPal — a financial service business (with its own nasty TOS) — that is practicing actual censorship (censor – an authority who can compel legal items to be removed based on the censor’s sole judgement). And there are hardly any squeals of outrage at all.
Why is everyone quiet? Because, for the moment, PayPal is targeting erotica. The bigger picture is being lost to discomfort over sexy books. The merchants being strong armed by PayPal are complying because they will face financial ruin if they don’t. PayPal won’t just shut down operations, it will withhold funds already collected and owed (including to non-erotic book authors). PayPal has done this before (it’s in the TOS). There’s a dedicated PayPalSucks site to document PayPal abuse.
I don’t really know the answer to TOS abuse. I know it is widespread, and hard to fight. Should it be legislated (we all saw how well that worked out with the big banks)? Class action suit (where the lawyers get the lion’s share of any winnings)? Hundreds of small claims lawsuits by erotica authors who are losing a big chunk of their income to PayPal’s effective restraint of trade? Group outrage (it worked on Amazon, but PayPal doesn’t seem as interested in actually serving customers as it does in tying up their money)?
As a (non-erotic) author, I’m actually afraid to use PayPal right now. I’ve always found it convenient. I think it was a brilliant idea for a business in the digital world. But when the business model is compromised by a need to control what customers and businesses are (legally) doing with their own money? This is where the word monopoly really comes into play. Smashwords and Bookstrand and All Romance Ebooks should have somewhere else to go, somewhere less willing to interfere with their successful business models.
I should be able to pull my business from PayPal for another, less judgmental digital financial service. With that kind of threat looming, I have little doubt that PayPal would reconsider its stance on controlling other people’s business and stick to controlling PayPal’s business.
Where is the competition? There surely has to be a place for a business that is going to do business, as opposed to being a Nosy Nelly who wants to control others with financial puppet strings. Isn’t there? We’ve created this digital landscape, where books and/or money can be vanished with a flex of a TOS. Why does it feel like 1984 is right around the corner if we don’t solve the PayPal puppet strings problem with some good solid public outrage and stiff competition?
Kelly McClymer is an opinionated new member of Book View Cafe, and a cheerleader of writers reaching readers however they can. You can visit her on her desperately-in-need-of-update website; Follow her on Twitter, hang with her onGoogle+, Like her on FaceBook, and share Pinterests with her. Oh, and she’s on Goodreads, too (once a reader, always a reader).