Many software licences 'unfair to consumers'

Leading software companies are routinely forcing computer users to sign up to unfair contracts that are badly worded, full of legal uncertainties and biased towards providers, the National Consumer Council said yesterday.

The NCC said that software purchasers, who were forced to accept the licences during the installation process, were being coerced into agreeing to terms that disadvantaged them. "Installation requires the user to agree to non-negotiable terms set out in a licence agreement," an NCC report into software licensing said. "These agreements are more like legal mandates than consumer options, raising concerns about the extent to which they favour the producer over the consumer."

The report is based on a study of 25 products from most of the biggest companies, including Microsoft, Adobe and McAfee.

The consumer group's concerns include complaints that licence agreements are often full of legal jargon that customers have little chance of deciphering, that providers are entitled to terminate contracts with no notice, and that liability exclusions are excessive.

The report urged the Office of Fair Tradingto scrutinise the software industry, focusing on the licensing agreements.

The NCC wants the European Union's Consumer Sales and Sales Guarantees Directive, which excludes software and digital content, to be amended.

"Plugging the gaps in consumer legislation is a vital move – consumers can't have a clue what they're signing up to when some terms and conditions run to 10 or more pages," said Carl Belgrove, the NCC's senior policy advocate. "There's a significant imbalance between the rights of the consumer and the rights of the holder."

Mr Belgrove pointed out that since the licences were electronic, and often only available in full online, consumers could not review their terms before they bought the software.

In more than half the cases studied by the NCC, the software's packaging did not make it clear that the purchaser would have to agree to a licence in order to install it.