The EFF describes it as allowing the company to be judge, jury, and executioner. They’re right.
But is there a better way to handle this?
Imagine requiring a company to provide the equivalent of a jury trial before it can kick someone off of an online game or online service. What kind of burden will be placed on the parties? Will the company need to show beyond a reasonable doubt, or by a preponderance of the evidence, that user IKillzUzLolz violated the terms of service? Or will IKillzUzLolz need to make a showing that he did not violate the terms of service?
And then the cost. Will these trials or tribunals be in-house to the company, or will they need to be third-party arbitration?
The EFF is right that ToS and ToU are harmful to consumers. However, the harm does not exist because the companies enforcing those contracts act as judge, jury, and executioner.
No, the harm is in the arbitrariness of the Terms themselves. This is certainly exacerbated by the unified enforcement role of the company, but the underlying issue is over-broad Terms that overreach.
Consumers are unable to understand their rights and obligations under most Terms of Service. This muxes-up some of the most fundamental concepts of contract law — consideration and reciprocity.2
Consumers should be protected from these adhesive contracts that place all the balls in a company’s court. The way to do that is to construe contracts in favor of consumers and require companies to clearly state a consumer’s rights and obligations.
Removing the arbitrariness of the underlying contract will not solve the problem of companies acting sua sponte in banning thousands of users. Nevertheless, removing arbitrariness will allow consumers redress in the courts and a chance to prove up a case if these so desire.