In The As-A-Service Society, Retailers Hold All The Cards, At Least For Now

Attorney Mark D. Rasch is the former head of the U.S. Justice Department's computer crime unit and today is a lawyer in Bethesda, Md., specializing in privacy and security law.

As we move from an ownership society to an "as a service" society, we radically transform the nature of the relationship between the consumer and the retailer. As consumers merely "rent" that which they used to own, the retailer has the ability—and the legal authority—to cut off the customers whenever the retailer changes his or her business model. Businesses create their own digital repossession rights, which leave consumers out in the cold. It may take new deceptive trade practice laws to reverse this trend.

I recently bought a replacement Amazon Kindle 3G. For an extra $50, I paid for 3G Internet access, which Amazon touted as giving me the ability to access the Internet, and download books without requiring my own Wi-Fi connection. For years I had various 3G (and before that 2G) Kindle devices, which allowed me to use the "experimental" web browser to check my e-mail, read the news, check sports scores, or even access documents. Because of its reliance on e-ink technology, the browser was slow and rudimentary, but useful nonetheless.

When my Kindle keyboard 3G stopped working, I replaced it with a Kindle touch 3G. But when I tried to use the touch 3G, I was in for a shock. The Wi-Fi browser allowed me to do all the things I could do before: download library books, check mail, etc. You know, a browser. But when it came to browsing over 3G, not so much. It's not that it was slow—it didn't work at all.

Several calls to Amazon revealed the "problem." Amazon had changed its policies, and now the 3G network only worked to buy stuff from Amazon. (Well, you could look up things on Wikipedia, but that's it.) No longer could you download library books. No price comparisons for books with Google or Barnes & Noble. No reading e-mail. But Amazon had an answer. If I didn't like it, I could return the Kindle. Take it. Or leave it. Two choices.

These provisions can be particularly draconian. Books purchased in the U.S. from the Google Play store won't resolve when you take your device to Singapore. The "seller" retains rights to the product sold, and control over it, even after the transaction is complete. And the transaction is never complete.

And that's the problem with the rental society.

I don't own the books I "bought." I don't "own" the music I bought from iTunes. I don't "own" my movies, my software, etc. I don't even "own" my Google documents, or my documents stored at Dropbox. I don't "own" my friends and my friends' e-mail addresses and contact information in LinkedIn and Facebook. Increasingly, things that I used to purchase and own I now rent. Which not only ties me into the provider (good for the provider) but also gives the provider the ability to disconnect me if they perceive that I violate their terms of service.

It also means that, if they change their terms of service, I have to agree to the change or risk loss not only of the service, but also the data and information accessed by the service. Every few weeks, my iPhone wants to upgrade my software. But if I want the upgrade, I have to agree to new terms of service, which may significantly impact my privacy or other rights. If I don't agree, no upgrade. Often, the software automatically updates, or I agree to the new terms just by continuing to do what I did before.

This means for example that Amazon can deny me access to all of my books if they think I am violating any of the terms of the agreement. My only recourse is to demand arbitration where I can prove that I didn't violate the agreement. Until then, I am hosed.

We have had laws relating to the ownership of property for thousands of years. We know what it means to "own" something. When we get to "rental," the relationship is defined by the contract. And you can bet that the contract written by the company will be to the benefit of the company.

We can expect one day to have a consumer backlash against these agreements. Until then, I guess I will have to go back to regular books. And that's too bad. Cause the new Kindle looked pretty cool.

If you disagree with me, I'll see you in court, buddy. If you agree with me, however, I would love to hear from you.