4

Why isn't it illegal, (extortion or duress), to force users to accept new Terms of Service by threatening financial loss, (like denying access to purchased content, or inhibiting or prohibiting the ability to earn an income)?

Users often heavily invest financially in those products for many years, (monthly fees, digital content like Amazon Kindle books, or cash transactions in games). And, they can lose all of their investments to sudden changes, (changes that severely limit rights they used to have).

For example: What if games that allowed real money economies suddenly denied users the ability to earn incomes? Or, what if Amazon were to stop people from lending books, or giving them to others, (if they allowed it in the past)? Or, what if games were to disallow people from streaming them, or suddenly restrict speech, or disallowing players to transfer items with each other? Or, what if Microsoft Windows was to suddenly change its license to mandate reporting how the software is used, by removing previously installed software support for optional reporting. etc…

Now, you may not transfer, exchange, sell, market, promote or solicit any of this platform's items or services you provide using this platform outside of this platform and must instead use this platform and currency for these.

Now, you may not engage in harmful, abusive, or hurtful criticism towards this platform or developers including communication via other platforms.

8
  • 1
    You need to give specifics. There are various possible reasons --legal as well as technological-- for updating a company's terms of service on its entire user base. Not all instances can be reasonably construed as provider's threat of financial loss. This can be assessed only on a case-by-case scenario. Aug 29, 2022 at 21:06
  • 2
    Yes, but we are not familiar with the terms and conditions of those examples. Some of us don't even use Amazon Kindle or play videogames at all. You need to provide enough details for us to be able to clarify whether or not the new conditions amount to a company's threat to inflict on its user base a financial loss. Aug 31, 2022 at 22:51
  • That consequence is inconclusive. Assessing the terms is crucial for ascertaining whether the provider is indulging in extortion or making a[n actionable] threat. That is why you need to provide enough specifics if you expect us to address the legal standpoint. So far what you describe falls short of extortion. Sep 4, 2022 at 20:44
  • 1
    "do these not constitute the required components of extortion?" No, they don't. The provider might have lawful reasons for requiring its user base to accept the new terms. Also the agreement under which a user signed up might contain a provision entitling the provider to modify the terms from time to time. Without knowing the relevant portions of the agreement there is no way to ascertain whether a finding of extortion is viable. "The actionable threat would be denial of further service/access." That is not what actionable means in law. Actionable has to do with filing a viable claim. Sep 4, 2022 at 22:55
  • "Are you asking about the terms of the changes?" Yes. You need to provide the exact terms of the relevant clauses, which might include those which you previously said are "largely incomprehensible". Without that, your question is overly broad and therefore unanswerable. Sep 6, 2022 at 0:00

2 Answers 2

3

Why isn't forcing users to accept new Terms of Service by threatening financial loss, (like denying access to purchased content, or inhibiting or prohibiting the ability to earn an income), considered extortion and therefore illegal?

Usually this is not illegal, and even if it is, it usually doesn't constitute extortion (or extortion's civil counterpart, which is called "duress", which is an affirmative defense to contract enforcement).

Generally speaking, exercising a legal right someone already has, for a purpose that is not improper, does not constitute extortion.

A TOS Rarely Creates A Reasonable Expectation That It Won't Change

Most importantly, in the case of terms of service governed information technology services, the firm that creates the terms of service reserves, at the outset, the right to change them at any time.

So, the user has no reasonable expectation that the terms of service won't change in a manner that they dislike. There is no implied promise to never change anything material about the service.

Terms of service are usually specifically drafted from the outset to avoid creating something that looks like a property interest on the part of the user in having the service continue to work in a particular manner.

TOS Terms May Not Be Unconscionable

Both the original terms of service and any subsequent amendment of them, is not permitted to be "unconscionable" (e.g. it can't make the life of your first born child a liquidated damages provision that applies if the terms of service are breached).

But, there isn't much of a legally protected reliance interest in not having the terms of service changed in this situation (although almost every general rule could conceivably have some exception to it, probably far more factually extreme than the fact patterns identified in the question).

If a term is unconscionable, it may not be enforced as contrary to public policy, without regard to what prior versions of the same agreement may have stated.

TOS Changes Are Usually Prospective Only

On the other hand, a terms of service amendment is generally only effective prospectively and does not generally change rights that have fully accrued and vested prior to their amendment, at least until the user takes some act to affirmatively continue to use the service going forward.

When there are vested rights under old versions, the remedy is not to characterize the change as extortion, however. It is to not apply the amendment to the terms of service retroactively to the already vested rights.

For example, if the old terms of service did not contain an arbitration clause, and litigation was in progress under the old terms based upon old transactions, and then a new terms of service were adopted that mandated arbitration, this amendment would not generally be applied to require the pending lawsuit in court to be stayed and transferred to an arbitration forum. The right to litigated vested when the lawsuit was filed.

1
  • 1
    Thanks! I updated the question to include "duress" along with "extortion." Oct 10, 2022 at 1:45
1

Why isn't forcing users to accept new Terms of Service by threatening financial loss, (like denying access to purchased content, or inhibiting or prohibiting the ability to earn an income), considered extortion and therefore illegal?

The lawfulness of applying new terms of services depends on the language of those terms. The pair of clauses you recently added fall short of extortion.

The Black's Law Dictionary defines extortion as:

Unlawful obtaining of money from another. [...] [E]xaction of money by reason of oppressive conditions or circumstances, [...]; obtaining of property from another, with his consent, induced by wrongful use of force or fear [...]. Obtaining of property of another by threats to injure him and to destroy his property. [...] Taking or obtaining of anything from another by means of illegal compulsion or oppressive exaction. [...] To constitute "extortion", money or other thing of value must have been willfully and corruptly received[...], the wrongful use of fear must be the operating cause producing consent.

Statutory definitions of extortion are largely similar to that from Black's Law Dictionary.

The prohibitions in the two clauses you reproduce are far from being oppressive. At no point do these prohibitions demand giving the provider money or thing of value. Nor do they entail a wrongful use of force of fear. Contrary to your description, these prohibitions make no threats as to "destroying" the counterparty's property.

The first clause only prohibits you to use external venues or platforms for transacting the "platform's items or services you provide using this platform". This requirement of exclusivity is not a threat of financial loss.

Although the second clause is lawful, its enforceability is dubious. The clause implies, inter alia, that you are not allowed to conspire with others to harm the site. By virtue of the covenant of good faith and fair dealing that is implied in all contracts, this clause is somewhat redundant. It is unenforceable insofar as the provider cannot realistically prevent its users from disparaging the platform elsewhere. Regardless, this clause cannot reasonably lead to a finding of extortion.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .