No Such Thing as a Free Lunch: Consumer Contracts and "Free" Services

Author

Kent Sebastian

Organization

Public Interest Advocacy Centre (PIAC)

Published

2013

Summary

Consumers access a multitude of online services that are termed as “free” for the average user. These services range from free calling (Skype) to data storage (flickr, YouTube, Dropbox) and retaining contact information (Facebook, LinkedIn). However in an era where the web companies providing such services are increasingly interested in monetizing their businesses, consumers can be the eventual losers in the deal; while consumer losses may not be financial, the use of their information poses both challenges to personal privacy and the use of metadata to drive advertisers to key audiences. While these services seem free – there is ultimately a cost.

Consumers’ interests in using these services are often subordinated by business considerations. This is reinforced through the terms of service associated with using these services – often these are restrictive in nature for the consumer, providing a lop-sided ability for companies to use and monetize data while giving users few recourses to action should a dispute arise. Further, because of limited definitions of a “consumer” found at law many of the provincial consumer protection laws, enacted to protect citizens against these types of contracts, are largely void for the users of free services.

This paper addresses the multitude of issues that arise for consumers using free services: legal, jurisdictional and definitional. Consumer attitudes, legal regimes and case law are surveyed in order to better understand the position of consumers when using free online services.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

Contact information

Source: Consumer Policy Research Database