Lawmakers Target Businesses' Terms of Service Agreements

A bipartisan group of U.S. lawmakers has introduced potential federal legislation aimed at simplifying the terms of service consumers must agree to before using online websites, apps, and services.

The Terms-of-service Labeling, Design, and Readability (TLDR) Act targets complex terms of service agreements, sometimes referred to as “terms-of-use” or “end-user license agreements,” which outline how a consumer may use a website or application.

The purpose of the TLDR is to:

  • Inform consumers of how their data is collected and used;
  • Empower consumers to compare simple and standardized terms-of-service summary statements across different websites and apps; and
  • Facilitate independent oversight and study of terms-of-service contracts, including data collection, legal liabilities, and data sharing with third parties.

The Act would require that online companies include a nutrition label-style summary table at the top of their terms of service and tag the full, long-form terms with links, making the agreements more accessible for consumers and researchers alike.

To enforce compliance, the bipartisan legislation would authorize the Federal Trade Commission to treat any violation as an unfair or deceptive practice and would allow State Attorneys General to bring a civil suit related to a violation on behalf of at least 1,000 affected residents of their state.

Small businesses

The Act would not apply to small businesses that are independently owned and operated, and those which are not dominant within their fields of operations.

Help is available

The attorneys at O’Reilly Rancilio are available to assist business owners with questions regarding regulations. For more information, please call 586-726-1000 or visit our website.

Categories: Business