Closed environments locking down consumers’ rights
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Deutsch: Geschlossene Systeme sabotieren Rechte der Verbraucher
Can you resell your used apps for your iOS or Android device? How about your video games that you purchased from Valve’s Steam Store?
The answer is yes and no. Legally, you are allowed to resell your used apps and Steam games if they were marketed in the EU. However, from a practical perspective, the owners of closed platforms such as Apple’s App Store and Valve’s Steam Store don’t allow users to transfer their unwanted software licenses to other users, effectively making it impossible for a user to resell their used apps and games.
According to the European Court of Justice (ECJ)'s decision in UsedSoft v Oracle case of last summer, if you pay a fee for software and are granted a license to that software for an unlimited period of time, then the copyright holder has exhausted their exclusive distribution right. Even if the license agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy. This applies to both software distributed on a physical medium (CD-ROM or DVD) as well as downloaded software. Thus, consumers in the EU are legally allowed to resell most of their apps and games.
However, closed environments like Valve’s Steam Store are preventing consumers from reselling their used software in two ways. The first is through restrictive user agreements. For example, the Steam Store’s license agreement states that “The Software is licensed, not sold. Your license confers no title or ownership in the Software.” However, since consumers pay a fee for a license that lasts an unlimited period of time, games bought via the Steam Store clearly fall under the UsedSoft v Oracle ruling and Valve cannot oppose their resale.
The other way closed environments like Steam prevent consumers from reselling their unwanted software is by failing to provide a mechanism that allows a Steam user to transfer a license of their software to another Steam user’s account. The omission of this simple mechanism makes it impossible for Steam users to resell their unwanted software, since the consumer has no way to complete a sale, which would require a license transfer of the software being sold to the buyer’s account.
Since consumers cannot resell their unwanted software purchased from closed environments, second-hand markets for used apps and Steam games are prevented from forming, even though distributors like Valve have exhausted their distribution rights and cannot oppose resale of their software.
With software increasingly being distributed via downloads, closed environments are gaining popularity. Apple, Microsoft, Google and Valve all distribute software for their platforms via their own closed environments. Owners of these closed environments take a percentage of the sales of any software distributed via their online store and the software developers who make the applications that are sold no longer lose sales to consumers buying cheaper used copies of their software instead of new copies.
Consumers, however, have their right to resell their digital property restricted and also lose access to secondary markets where they would be able to obtain the same product at lower prices. As software is increasingly distributed via closed environments, we must protect consumers’ right to own and resell their software.
ECJ case - UsedSoft v Oracle ruling (3.07.2012)
(Contribution by Michael McNeff - HalfPriceDigital.com)