LONDON (02/20/2008) - Large software companies are exploiting catch-all licences to rob consumers and small businesses of their rights, the U.K.'s National Consumer Council (NCC) has said.

Research carried out by the NCC found that EULAs (end-user licensing agreements) were badly-worded, typically exonerating software companies from any legal responsibility for their products, and left buyers with "less protection than when they buy a cheap biro."

The NCC said it will now refer the 17 worst offenders—including Microsoft, Apple, Symantec, Kaspersky, and McAfee—to the U.K.'s Office of Fair Trading (OFT) for investigation. Given the way licences vary from country to country, the NCC also plans to lobby the EU to extend its Consumer Sales and Sales Guarantees Directives to cover software.

"Plugging the gaps in the EU consumer rights and protection framework 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. There's a significant imbalance between the rights of the consumer and the rights of the holder," said the NCC's Carl Belgrove.

The NCC recommends that software companies make EULAs available before purchase, take the proper responsibility for their products as do vendors in other industries, and stop hiding onerous terms and conditions behind legal jargon that nobody can understand.

Microsoft, for one, claims it has made efforts to cut out mindless legal jargon. Even so, its best efforts still only reduced its 100-page "product use rights" document to half that length.

Perhaps the most notorious use of a EULA was Sony's misleading use of the form to install DRM software that turned out to operate as a hidden rootkit. In fact, some argued at the time that had Sony worded its EULA more carefully, the subsequent legal action against it for its carelessness might have proved impossible.

The referral to the OFT by the NCC will be seen as a test case. Regardless of the outcome of this action, harmonization of licensing looks inevitable across Europe at some stage. The EULA won't die but it is certain to change.