Netscape Communications customers suing the company for privacy invasion are not bound by an end-user license agreement forcing them into arbitration, a federal appeals court panel ruled Tuesday.
At least three groups of Netscape users have sued the company in recent years, alleging that the AOL Time Warner unit's SmartDownload software invaded people's privacy and violated laws prohibiting electronic surveillance by sending their personal information back to the company. AOL shuttered the tracking feature soon after it was sued.
"A reasonably prudent Internet user in circumstances such as these would not have known or learned of the existence of the licensing terms before responding to defendants' invitation to download the free software," the judges wrote.
I think there will be more litigation in this area. How many people read the "I Agree" statement when they download something? How many people would actually understand it if they DID read it?
I think what could evolve is a requirement for a "summary of terms" that highlights key points in plain English. Some industries (not including software!) are already moving to plain English contracts with consumers. With the way software companies do it now, I think there will be more rulings invalidating a term contained in paragraph 27 of 35 in a tiny "I agree" text box.