What We Buy When We Buy Now

Copyright and Trademark, Intellectual Property, Media and Content, Internet and Networks, the Internet, and Cloud Computing

Article Snapshot

Author(s)

Chris Hoofnagle and Aaron Perzanowski

Source

University of Pennsylvania Law Review, Vol. 165, No. 2, pp. 315-378, 2017

Summary

Many consumers are unaware that digital books, movies, or musical work cannot be transferred to others. Because consumers’ expectations are shaped in markets for tangible books, records, and CDs, sellers’ use of terms like “buy now” for digital media is deceptive.

Policy Relevance

Sellers should disclose limits on the rights that consumers acquire when they buy digital media. Disclosure would spur competition between sellers of digital media.

Main Points

  • In 2009, consumers were surprised when some e-books purchased from Amazon.com were removed from their collections because of a dispute between Amazon and the publishers.
     
  • Unlike a purchase at a bookstore, a consumer’s purchase of digital media creates a continuous link between buyer and seller, giving the seller the power to change, remove, or limit the use of the goods even after the sale, a power that would be impossible in physical markets.
     
  • The end user license agreements (EULAs) under which digital media goods are sold restrict purchasers from lending the goods, giving them as gifts, or reselling them; these restrictions are unfamiliar to consumers used to tangible goods like books, records, and recorded movies.
     
  • Most consumers doe not read EULAs, which are long and difficult to understand.
     
  • In response to survey questions, consumers expressed a desire for the right to lend digital goods, give them as gifts, or resell the goods, and many expressed a willingness to pay more for digital goods that come with a traditional bundle of ownership rights.
     
  • Survey respondents suggested that they would prefer to obtain goods through streaming services or BitTorrent downloads if unable to obtain traditional ownership rights when buying digital goods.
     
  • Consumers are misled by language like the “Buy Now” button, which relies on expectations developed in the tangible goods economy; the use of language like “buy now” amounts to false and deceptive advertising.
     
  • Consumer should be shown a short notice to improve their understanding of the rights they obtain when they buy digital goods.
     
  • Once consumers are better informed about the restrictions on their ownership of digital goods, they might decide to buy physical copies instead, or prefer to buy media access through subscription streaming services.
     
  • Disclosure could spur competition between retailers to give consumers different bundles of ownership rights, rather than competition over price alone.
     

 

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