Google Glass and the Demise of Ownership

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VILLASENOR J., Google Glass and the Demise of Ownership, slate.com, 23.04.2013

Type Article
Abstract What the restrictions on resale of the gadget mean for consumers.
Link http://www.slate.com/articles/technology/future_tense/2013/04/google_glass_terms_of_service_restrictions_on_resale_are_bad_for_consumers.html
Topics Business Model, Competition, Consumer, Contract, Property, Transparency

Notes

"[O]wnership isn’t what it used to be."

"Welcome to the shrinking privileges of ownership in an always-connected world. Are these terms beneficial for consumers? Clearly not. Are they even enforceable? To at least some extent, they probably are."

"In its March 2013 ruling in Kirstaeng v. John Wiley & Sons Inc., the Supreme Court cited Lord Coke and wrote that “American law too has generally thought that com­petition, including freedom to resell, can work to the ad­vantage of the consumer.”"

It is true that copyright law and patent law offer the first sale doctrine and the patent exhaustion, but "the first-sale doctrine and patent exhaustion, which reflect federal law limitations on the rights of intellectual property holders, are not the only considerations. Contractual obligations are also important. A purchaser who enters into and then violates an agreement prohibiting resales could be exposed to a breach-of-contract claim. If your purchase of Glass from Google was accompanied by a promise not to commercially resell it, turning around and offering your Glass to the highest bidder on eBay could land you in hot water."

"Another complication is that Google Glass, like many recent- and emerging-generation consumer electronics products, is made useful largely through its ability to connect to license-based service offerings. When you use a service such as Google Maps, you do so under a license to access the associated content—you’re a licensee, not an owner of that content."

"The model of requiring purchasers of consumer electronics devices to first enter into restrictive contracts as a condition of sale and then to agree to restrictive licenses when using those devices raises multiple concerns. Most fundamentally, it does an end run around legal frameworks that evolved specifically to prohibit anti-competitive and consumer-unfriendly downstream control over transfers of ownership. And it’s confusing for consumers."

"It’s tempting to think of the Glass resale restriction as simply another unwelcome consequence of the many legalese-laden agreements that we all encounter when using almost any online service. But most of those agreements involve restrictions on data, not the devices on which they reside. You can’t resell files containing songs downloaded from Amazon, map data from Google, or restaurant recommendations from Zagat. Our purchased devices, by contrast, have generally been ours to keep, sell, loan, or donate as we see fit. That flexibility is lost when a purchase comes with restrictions like those in the Glass terms of sale."

"So, what’s the solution? Ideally, device sales shouldn’t come with downstream resale restrictions. People who buy consumer electronics devices ought to be free to enjoy all the traditional privileges of ownership—including the ability to dispose of them on terms of their own choosing. Companies unwilling to provide that flexibility should at least ensure that their customers are clearly informed of the strings attached to “ownership.”"

"If consumers display a reluctance to accept overly restrictive device sale terms, market pressure should force companies to adopt terms ensuring that we really own the things we buy. But if the heated competition for the right to buy Google Glass is any indication, we won’t see that market pressure brought to bear any time soon. That’s unfortunate, because there’s a risk of creating a new normal that leaves consumers with a substantially diminished set of rights regarding their devices."