Terms of Service

Author: Luca Belli

Internet intermediaries, in general, and platforms, in particular, use to regulate the services they provide through standard contracts, commonly referred to as terms of service or terms of use. Terms of Service are standardized contracts, defined unilaterally and offered indiscriminately on equal terms to any user or to specific categories of users (e.g. commercial, non-commercial, or individual users, etc.). Since users do not have the choice to negotiate, but only accept or reject these terms, Terms of Service are part of the legal category of adhesion agreements – also known as “boilerplate contracts” (Radin 2012)¹ – as the user merely adhere to the contractual clauses.

Indeed, the main feature of standard contracts is that the text is not the product of a negotiation (Prausnitz, 1937)². On the contrary, the conditions are pre-determined by and express the one-sided control of a single party, thus representing a form of “quasi-normative” power, expression of the “private sovereignty” of the party that unilaterally defines them. (Belli, 2016³ & 2022⁴; Cantero Gamito, 2017)⁵ Over the past few years, this type of contract has become the object of numerous critiques, ranging from the unilateral definition of the provisions, the almost entire absence of negotiation between the parties, and the quasi-inexistence of the bargaining power of one party that is required to adhere to the terms (Radin, 2012⁶; Kim, 2013⁷; Belli; Sappa, 2017⁸).

Internet users’ mere adherence to the terms imposed by the intermediaries gives rise to a situation where consumers mechanically ‘assent’ to pre-established contractual regulation. Furthermore, terms of service usually foresee that the intermediaries may continue to modify the conditions of the contractual agreement unilaterally. Hence, except for the possibility to “take it or leave it”, users have no meaningful say about the contractual regulation they are forced to abide by. This context o’ ‘contractual authoritarianism’ (Ghosh, 2014)⁹ is further exacerbated in the Internet environment. Besides having the power to unilaterally dictate the terms of use, intermediaries also enjoy the capability to unilaterally implement, through technical means, the private ordering crafted by the contractual provisions (s., e.g., Belli & Venturini, 2017¹⁰, Belli & Zingales, 2017¹¹).

As noted by the Recommendations on Terms of Service and Human Rights developed by the IGF Coalition on Platform Responsibility, the concept of ‘terms of service’ utilized here covers not only the contractual document available under the traditional heading of ‘terms of service’ or ‘terms of use”, but also any other platform’s policy document (e.g., privacy policy, community guidelines, etc.) that is linked or referred to therein. 

Platform providers may have ample contractual autonomy to define the contractual provisions that regulate their terms and, importantly, the scope and breath of terms of service’s regulatory function can only limited by the existence of laws and regulation striking a balance between the protection of users’ rights and the contractual autonomy of the intermediaries (Belli; Venturini, 2016)¹². Terms of service are therefore the preeminent legal instrument of the private ordering that regulates each platform. Hence, in the absence of comprehensive fundamental rights protection and consumer protections, private actors providing any kind of digital service may abuse their central role in the “contract governance” (Grundmann et al., 2015)¹³ of their systems, contractually regulate their services in a way that may be seen as the most economically efficient, but may not be the most user-interest-oriented. 

In this context, an analysis of the terms of service of 50 amongst the most popular online platforms, conducted by the Center for Technology and Society at FGV in partnership with the Council of Europe, assessed the compatibility of such documents with international human rights standards on to freedom of expression, privacy, and due process, and revealed a considerable imbalance of power between platforms and users (Venturini et al. 2016)¹⁴. While corroborating the fundamental regulatory role of terms of service in shaping the platform’s private ordering, the abovementioned study also demonstrates that platform choices, while aiming at achieving the most efficient outcome for the platform provider, may frequently neglect the full protection of users’ rights. 

References

1. Radin, M. J. (2012). Boilerplate. Princeton University Press.
2. Prausnitz, O., Chorley, R. S. T. C. B. (1937). The standardization of commercial contracts in English and continental law. Sweet & Maxwell, Limited.
3. Belli, L. (2016). De la Gouvernance à la régulation de l’Internet. Berger-Levrault. 202-208.
4. Belli, L. (2022). Structural Power as a Critical Element of Social Media Platforms’ Private Sovereignty. In Celeste, E., Heldt, A., and Iglesias Keller, C. (Eds). Constitutionalising Social Media. Hart. http://bit.ly/BelliPrivateSovereignty
5. Cantero Gamito, M. (2017). Regulation.com: self-regulation and contract governance in the platform economy: a research agenda. European journal of legal studies, Vol. 9, No. 2, pp. 53-68. https://cadmus.eui.eu/handle/1814/46068  
6. Radin, M. J. (2012). Boilerplate. Princeton University Press.
7. Kim, N. S. (2013). Wrap contracts: Foundations and ramifications. Oxford University Press.
8. Belli, L., Sappa, C. (2017). The intermediary conundrum: cyber-regulators, cyber-police or both. J. Intell. Prop. Info. Tech. & Elec. Com. L., 8, 183. Available at: http://www.jipitec.eu/issues/jipitec-8-3-2017/4620.
9. Ghosh, S. (2014). Against contractual authoritarianism. Sw. L. Rev., 44, 239.
10. Belli, L., Venturini, J. (2016). Private ordering and the rise of terms of service as cyber-regulation. Internet Policy Review, 5(4). 1-17. Available at: https://policyreview.info/articles/analysis/private- ordering-and-rise-terms-service-cyber-regulation.
11. Belli, L., Zingales, N. (2017). Platform regulations: how platforms are regulated and how they regulate us. FGV Direito Rio.
12. Belli, L., Venturini, J. (2016). Private ordering and the rise of terms of service as cyber-regulation. Internet Policy Review, 5(4). 1-17. Available at: https://policyreview.info/articles/analysis/private- ordering-and-rise-terms-service-cyber-regulation.
13. Grundmann, S., Möslein F., and Riesenhuber K. (eds). (2015).  Contract Governance: Dimensions in Law and Interdisciplinary Research. OUP 
14. Venturini, J., Louzada, L., Ferreira Maciel M., Zingales, N., Stylianou, K., Belli, L. (2016). Terms of service and human rights: An analysis of online platform contracts. FGV Direito Rio – Revan Editora – Council of Europe. http://bibliotecadigital.fgv.br/dspace/handle/10438/18231