|From: Scott Ellsworth
Date: Mon, Sep 11, 2000 8:08 PM
Subject: Software warranty protection
Please find enclosed my comments on warranty protection for high-tech products and services, as solicited on the FTC web page http://www.ftc.gov/os/2000/05/hightechforum.htm.
I work in the software industry as a consultant, and I feel that most software manufacturers in this industry do not need special protection from standard warranty and contract law. As consultants, my company includes quality standards in our contracts, and makes sure that we discuss the expected costs to fix defects, and so I feel that our work would meet the standards of merchantability that every housing contractor must meet every day that they work. Most mass market software is not written with such a statement of quality level, and comes with unilateral license agreements that are clearly unenforceable. Enshrining this travesty harms the consumer, and makes the overall experience inferior to that experienced by consumers of many other goods and services.
I am also an amateur musician, thus I see that branch of software from a consumer point of view. This experience strengthens my feeling that special protection for software and high tech companies is not going to improve the experience of the US consumer. Most music software is unreliable, expensive, subject to frequent outages, and involves substantial cost for upgrades that often break as much as they repair.
I have not seen compelling evidence that software needs a different set of standards for functionality. Even basic contract law includes the concept of merchantability for all purchased products. If software and high tech services cannot meet the same merchantability requirements that virtually every other product must, one must ask why. In general, the answer is not that it cannot, but that the companies in question do not feel a need to make the products work.
Consider - an automobile with a fundamental structural flaw that makes it unsafe, or unusable, a recall notice is sent out. The product is fixed at a service center, or a trade is arranged, all free of charge. Software, on the other hand, often has known long standing bugs. Rather than fix these bugs, the makers usually bundle them with changes to the functionality. Since every change in software has a chance of causing a bug, the consumer is not able to just have the flaws fixed. Instead, they must pay a price that is often not far from retail price for a new purchaser to get the fixes they need to make the product function up to the standard that the documentation promises.
Further, the license agreements for most products are of dubious legality, unless legislation such as UCITA makes it legal. When an entire industry wishes to legalize trade practices that no other industry could legally do, this should raise a warning flag. These agreements often remove fundamental rights, or prevent standard intellectual property doctrine in ways that do not help the consumer. For example, most prevent fair use, or archival backups. I personally possess over fifty software titles bought in the two decades whose media could not be replaced or could not be used on present day computers, yet by many agreements, I am prohibited from trying to create an archive that could be so used. The companies that these agreements were entered with have, in many cases, merged with others, or folded, yet the agreements contain no limitations in term.
Many companies claim that the agreement goes in effect as soon as the package is opened, and require it to be returned if the terms are not acceptable. Most retailers do not allow returns of software whose outer package has been opened, thus there is no way for a consumer to perform that return. Further, these agreements often contain language allowing the company to substantially alter the licence terms post transaction. Were I to write into a sales contract that I can deliver any product I want, or that I can even deliver no product at all, the contract would be likely unenforceable. Many licenses have terms that amount to this.
Software frequently falls far sort of the protections that most other products have under the Magnuson-Moss Warranty Act and the Uniform Commercial Code. There is little benefit to the consumer to weakening these protections which have worked in other fields. For example, many computers are sold with five year loan programs, yet software often will fail to operate on machines where the consumer is still making payments. (Apple Computer, for example, is not going to support their upcoming OS X on clones, yet these clones were fully supported by Apple computer just four years before.)
Consumers expect reliability to be poor. On the Tascam web site supporting their newly released US-428 MIDI/USB control surface, they suggest that the only way to have a truly reliable system is to create a brand new one with no extra software. Many of the consumers posting problems comment that they have done so before this new device shipped, as they found that the Microsoft Web browser, email software, and word processing software that many PCs come with by default interfered with their ability to use the machine for music. This is not a healthy sign.
Shielding manufacturers from this liability by shifting it all on to the consumer is hardly likely to encourage reliability. Ford Motor Company found that consumers valued quality when it started the "Quality is Job 1" program. They would clearly have been willing to coast without doing so, save that foreign imports had already taken a substantial fraction of the market, despite higher production and transport costs, and despite a large premium on the sales floor. I do not want this to happen to the American software industry, but it seems clear that quality comes after new features, and bug fixes for older software do not enter the equation at all. Therefore, there is no compelling reason to increase consumer liability by protecting software companies.
Software, despite the opinions of the software manufacturers, is a product like any other. It needs to be used in conjunction with other products, and may need to undergo substantial changes over time, but it is still a product. The rules by which every other manufacturer of products must operate are well understood by both consumers and manufacturers. I cannot express how strongly I feel that consumers need these protections and rules in software just as much as we did for every other product.
Thank you for considering these comments.