Consumer Confidential: What it means to ‘buy’ digital goods
Maybe not as much as you think.
It’s all about what the tech industry calls digital rights management, and the bottom line for consumers is that there are significant differences between owning a tangible product and owning its electronic equivalent.
A recently released study by researchers at Case Western Reserve University School of Law and the University of California, Berkeley finds that “a sizable percentage of consumers” have no clue about what they’re really purchasing when they “buy” digital content.
“They mistakenly believe they can keep those goods permanently, lend them to friends and family, give them as gifts, leave them in their wills, resell them and use them on their device of choice,” it says.
In other words, they think buying something means buying something. But in the magical land of digital content, ownership is relative.
“The reality is that for many digital transactions, there are restrictions on activities you might think come with ownership,” said Aaron Perzanowski, a Case Western Reserve University law professor and co-author of the study.
He told me consumers received a wake-up call in 2009 when Amazon electronically erased George Orwell’s “1984” and “Animal Farm” from people’s Kindle e-readers because of a copyright dispute. Although Amazon gave refunds for the deleted books and subsequently said it wouldn’t pull a stunt like that again, the point was made.
“It showed that things are different when it comes to digital content,” Perzanowski said. “This wouldn’t happen in the physical world. No one comes to your door and demands that you give back a book. But in the digital world, they can just go into your Kindle and take it.”
Yet consumers remain largely unaware of such distinctions.
“When you buy a physical object, you have a bundle of things you can do with it,” said Raza Panjwani, policy counsel at Public Knowledge, a digital-rights advocacy group. “You can lend it, you can sell it, you can set it on fire.”
And when you die, you can leave your possessions to others. But, asked Panjwani, “Can you leave your Kindle library to someone?”
The answer, he said: “Unclear.”
The new study, titled “What We Buy When We Buy Now,” found that about 83 percent of survey respondents believe that when they purchase digital content, they own it just as they own a physical good.
It’s a reasonable belief. However, digital content sold on digital platforms comes with different rules – rules that, as Amazon has shown, are uniquely enforceable.
The fine print for Amazon’s Kindle Store says that “unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sublicense or otherwise assign any rights to the Kindle content.” Similarly, the fine print for Amazon Music says “you may not redistribute, transmit, assign, sell, broadcast, rent, share, lend, modify, adapt, edit, license or otherwise transfer or use purchased music or Prime Music content.”
Apple’s iTunes Store has the same restrictions. Its fine print also stipulates, ominously, that “Apple and its licensors reserve the right to change, suspend, remove or disable access to any iTunes products, content or other materials comprising a part of the iTunes service at any time without notice.”
Neither Amazon nor Apple responded to my requests for comment.
Of course, there are benefits to obtaining content in digital form. It’s often (but not always) cheaper. It’s more portable. It’s much easier to store. Amazon and Apple both offer ways to share content with family members.
The issue, Perzanowski said, isn’t whether publishers and tech companies have a right to license and control digital content, or to ensure that copyrights are protected. They have that right.
Rather, the issue is whether all these terms and conditions are being communicated clearly and fairly to consumers. As Perzanowski sees it, they’re not.
It’s all about the “buy now” button that you have to click on most sites to complete a transaction.
“There’s a lot of meaning built into the phrase ‘buy now,’” Perzanowski said. “It’s not saying ‘rent now.’ It’s not saying ‘gain conditional access.’ It says ‘buy,’ and that means something very specific to most consumers – something that, in the case of digital content, isn’t true.”
He and the study’s co-author, Chris Hoofnagle, an adjunct professor at UC Berkeley’s School of Information, propose a simple and, I think, effective remedy.
Rather than a “buy now” button (or “get now” or similar labeling), they say there should be an easy-to-read box making clear what a consumer can and can’t do with the digital content being purchased.
For an e-book, say, the box would specify that a buyer could read it on an approved device and keep it subject to the service’s terms of use. It also would state that the buyer couldn’t lend, give away, resell or read it on an unapproved device. Above the box would be a button that simply shows the price.
The study found that when consumers are given a plain-language disclosure like this, awareness of their rights – or lack of rights – improves significantly. It also found that many consumers would be willing to pay a little extra for the ability to share digital content beyond immediate family members.
“Language like ‘buy now’ confuses the contexts of offline and online purchasing,” Hoofnagle said.
He and Perzanowski said it would be ideal if all interested parties adopted disclosures voluntarily. If that doesn’t happen, they said, the next move would be for the Federal Trade Commission to consider a regulation requiring such openness.
The pair already have presented their findings to the FTC. “They were interested,” Perzanowski said. An FTC spokesman declined to comment.
I’m not surprised regulators would sit up and take notice. The study concludes that current use of the “buy now” button “constitutes false and deceptive advertising.”
That should be a red flag to the digital-content industry.