Microsoft Corp.'s recent hasty revision of its terms-of-use policy for its Passport
product last week is just the latest--and possibly most dramatic--reaction to
a growing revolt against vendors who try to impose ridiculously lopsided use agreements
on their customers.

Most people never read these documents, called End User License Agreements
(EULA) or Terms of Service (TOS). Until recently, there was probably not much
reason for most to do so: They were confusing, rarely invoked, and varied wildly
among vendors. Even when customers read the EULA or TOS, they rarely complained
about the document's terms because little of the content demanded attention.

So why has the "fine print" suddenly become a cause célèbre?
It's because states have begun adopting in mid-2000 a set of national e-commerce
rules called the Uniform Computer Information Transactions Act. The document
is a commercial code for software licenses and other computer information transactions.
It was produced by the National Conference of Commissioners, an organization
of legislators, judges, law professors, and attorneys from every state, who
produce the uniform state commercial laws.

Post-UCITA, companies are using far more restrictive language in their EULA
documents. Some agreements let the software maker perform highly invasive scans
of the user's system. They may limit the methods by which consumers can resolve
disputes, or even restrict customers from complaining publicly about a product.

Customers push back

Consumers' angry reaction to some of these new rules has been swift: In recent
months Juno, Adobe, Verant, and now Microsoft have been among a number of companies
that have felt the sting of a backlash against particularly unreasonable licensing
terms for the use of software and web services.

Some consumer groups argue that the most restrictive clauses violate the customer's
right to privacy and, potentially, the right to free speech. Vergil Bushnell,
e-commerce analyst for the advocacy group Consumer Project on Technology, charges
that UCITA's unclear language gives companies free reign to craft egregious
terms into their EULAs.

"The drafters of UCITA adopted nebulous standards, rejecting more specific
language that would have ruled out contractual restrictions on free expression,"
Bushnell says. "UCITA...give[s] software publishers wide latitude to incorporate
one-sided and oppressive language into their contracts," Bushnell says.
Several vendors declined comment on this hot topic.

Many factors seem to be in play, including vendors anticipating state ratification
of the new federal e-commerce rules. (Only states have the power to make laws
governing commerce, which is why UCITA isn't the law of the entire land. So
far only Virginia and Maryland have added UCITA rules to their state laws.)
But in many cases, the software companies seem to be playing the game as though
they're both player and referee, in some

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