Digital Platforms And Their Terms Of Use: Does It Matter?

The many digital platforms are transforming almost every industry today; it is swiftly becoming apparent that the similar looking terms of use and privacy policies currently applicable may not provide new entrepreneurs or platform users with an adequate sense of security. This inadequacy, coupled with an ever-increasing demand for technology lawyers in Dubai, necessitates a need for such entrepreneurs and platform users to become more cautious in regards to covering themselves against risks and losses.

A simple example of why new entrepreneurs are becoming progressively more cautious when covering themselves from risks and losses would be the knowledge that one of the crowdsourcing Apps recently invited users to undertake mystery shopping.

This example depicts the necessity for privacy policies and terms of use which will reduce the risks and losses when engaging in transactions on the digital platform.

The crowd-sourcing App in this particular case provided the Mystery Shoppers with a certain amount of store credit. The shopper could use such monetary value on the App for in-store purchases. However, for the shopper to use the store credit to partake in the mystery shopping, the App holders had to pay an activation fee. This activation fee paid by the App holders wanting to participate in mystery shopping enabled them to access the credit on the App. Once they had transferred this, the participants would go to the store only to find out that there is no credit available on the App. The theft of the activation fee is then known to them.

The terms of use on a website, in the form of Terms and Conditions, and the Privacy Policy are the basis of the express or implied contract between the platform owner and its users. Their effect is to limit liability and offer protection to digital platform owners. However, the question here is; what protection do platform users have; and does the online acceptance of today stand as a valid agreement against the law.

Terms and Conditions clause

Regarding the abovementioned example, the user of the digital platform was the party to bear the losses and risks caused by the actions of the third party - the scamming company. Below will be an example from the Second Circuit Court of Appeals, of how the owner of a digital platform did not sufficiently cover itself against risks and losses in its Terms and Conditions.

In this case, the user signed up for a programme that provides discounts on products and services in consideration of monthly fees. Following the users' enrolment and use of the application, he received an email from the defendant. In the email, there were additional Terms and Conditions, inclusive of an arbitration provision of a mandatory nature. Such new Terms and Conditions were never expressly consented to by the user. The user canceled his account and claimed a full refund, to which the defendant only provided a partial refund. The user then commenced a class action, to what end the defendant responded by seeking to enforce the arbitration provision in the additional terms and conditions. The court a quo concluded that the user had never agreed to the new terms and conditions, the Appellate court upheld the conclusion.

With consideration of precedent regarding contract law and enforceability in the context of shrink-wrap and agreements of an electronic nature, the emailed Terms and Conditions would be binding if:

After receiving actual notice, or at a minimum, inquiry notice regarding the additional terms; and The user then manifested his assent, expressly or implied. The law does not require Terms and Conditions on a website, however as can be noted above, having adequate Terms and Conditions, to...