Digital Asset Planning: Who Will Care for Your Pokémon When You’re Gone?

Study Shows Users Don’t Read Terms of Service Agreements

Not surprisingly, a recent study shows that users don’t read Terms of Service Agreements and Privacy Policies. In a July 7, 2016, working paper, Jonathan Obar and Anne Oeldorf-Hirsch reported that, in their experiment, 98% of users missed the “gotcha clauses” they planted in the Terms of Service Agreement and Privacy Policy for a fictitious social networking site they created. One of the “gotcha clauses” was that, by agreeing to the Terms of Service Agreement, the user would immediately assign their first-born child to the company!

In their experiment, the fictitious company had a 4,316-word Terms of Service Agreement for the user to read when signing up for the company’s social networking site. By comparison, Google’s Terms of Service Agreement (revised April 14, 2014) runs 1,881 words, Facebook’s Terms of Service Agreement (revised January 30, 2015) runs 3,159 words, and Yahoo!’s Terms of Service Agreement (revised March 16, 2012) runs 5,585 words. The working paper notes that an average adult should be able to read the 4,316-word Terms of Service Agreement used in the experiment in 15-17 minutes. However, in the experiment, 86% of users spent less than one minute reading the Terms of Service Agreement, and 97% of users spent less than five minutes reading the Terms of Service Agreement. Only 9 of the 527 participants in the experiment (1.7%) reported noticing the “gotcha clause” requiring the user to assign their first-born child to the company.

From an perspective, some Terms of Service Agreement provisions are important to consider, especially when planning for a user’s incapacity or death. Here are several provisions to consider in reviewing Terms of Service Agreements:

  1. May the user share the user’s password or let others access the user’s account? For estate planning, this is important to determine whether a fiduciary or can access the user’s account during the user’s incapacity or after the user’s death. If someone other than the user accesses the user’s account and “exceeds authorized access”—which could include violating the access rules of a company’s Terms of Service Agreement—that person could be charged with a crime under applicable state law, under the federal Computer Fraud and Abuse Act (18 U.S.C. § 1030(a)(2)), or under the federal Stored Communications Act (18 U.S.C. § 2701(a)) For example, Section 4.8 of Facebook’s Terms of Service Agreement (revised January 30, 2015) says “You will not share your password…let anyone else access your account, or do anything else that might jeopardize the security of your account.”
  2. May the user transfer the user’s account? For estate planning, this is important to determine whether the user’s account may be transferred to another individual, to the trustee of a revocable living trust, to the trustee of an irrevocable trust, to a Limited Liability Company (LLC), to a partnership, or to a corporation either during the user’s lifetime or after the user’s death. If the user breaches the account transfer restrictions in the company’s Terms of Service Agreement, it could be grounds for the company to terminate the user’s account.
  3. Does the user’s account terminate on the user’s death? For estate planning, this is important to know what planning needs to be done during the user’s lifetime to preserve and protect the user’s account contents and what planning options are available after the user’s death. For example, Section 28 of Yahoo!’s Terms of Service Agreement (revised March 16, 2012) says “You agree that your account is non-transferable and any rights to your ID or contents within your account terminate upon your death.”
  4. What rights to the user’s data are being assigned to the company? For estate planning, this is important to know what are involved. For example, is the user granting the company a license to use original works of authorship of the user that may be protected by copyright law? If so, does that license continue after the user’s death or after the user’s account is deleted?
Eleanore

Eleanore

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