The legal culture that is America

The battle for supremacy in the world of hand hygiene is a dirty one, and nothing demonstrates this better than the depressing sight of a paper towel dispenser with a EULA.

That’s right: even dumb plastic boxes whose only use in this world is to hold paper towels apparently need an end-user license agreement now. In this case, the EULA — spotted by Harvard Library curator and Twitter user John Overholt at a recent conference — forbids the people who have to refill this Tork dispenser from using rival, non-Tork products.

Here is the full story, via the excellent Samir Varma.


Let me guess. It's a Federal crime to violate the EULA?

Depends on how clever the EULA writer are - and whether anyone cares enough to go through a likely series of court cases, including whether a court will grant that such a party has the right to sue in the first place.

A contract must be understood by all parties and agreed upon by all parties. How would you or could you make that any better???

We understand you removed the little tag from your mattress!

In socialist Australia you own paper towel dispenser. In capitalist America paper towel dispenser owns you!

From the twitter comments: the paper towel company owns the dispenser and provides it for free. In exchange you have to use their towels.

Based on my personal experience, dispensers like that are broken half the time and fail to dispense anything. There's usually a handle or a crank of some kind and impatient users end up damaging it. So if the company takes on the burden of maintaining and repairing them promptly, it might be worthwhile for a campus with dozens of restrooms to outsource the whole thing.

The contract with the company might also include actually keeping the dispensers filled with paper towels, freeing the site itself from paying people to do that (possibly at higher labor cost) and maintaining large on-site inventories (that might be subject to pilfering).

In that case why couldn’t they just lease it for free instead of giving away for free? And avoid this EULA nonsense.

They do. "This dispenser is the property of SCA Tissue North America and is loaned for dispensing only Tork branded refills."

Yakov, is that you? America - what a country!

only in amerika do
ivy league psychiatrists actually do exorcisms!

EULA is not the law. That has nothing to do with the legal culture. That is business culture of proprietary lock-in. The same thing happens with inkjet printers where the cartridge is chipped. MBAs can't innovate so they resort to these predatory tactics.

it's not predatory, you can always refill with non-approved paper towels, just like with inkjet cartridges, somewhere else, unless the dispenser is customized like a razor blade holder is so as not to accept the towels. Google first sale and repair doctrine.

Bonus trivia: if you buy non-authorized inkjet cartridges, they are usually a bit inferior to the real deal, but adequate (I do it all the time); in the Philippines they have a "tank" system where you can print with bottles of liquid ink, it's much superior to the tiny inkjet cartridges in the USA if you need to print 1000s of color pages. Printing is highly developed in southeast Asia, since that's how advertisements are done, rather than TV as in the USA. "Tarp" printing they call it.

Gives a new twist to the concept of an "end-user" license agreement.

More like "end-loser" agreements. These stupid things clog up our legal system. Way to externalize costs on society.

What is the issue here? (other than the usual lazy blame big corps). Is hand drying a Government Controlled monopoly? If not I think we should let people and corporations make their own contractual arrangements without second guessing. If people don't like it they are free to make other arrangements with companies who don't do this. Like the people who complain about cheap printers that require expensive ink. Don't complain, just don't buy them. If enough people feel the same way as you, the company doing this won't be around very long.

One can complain and also not buy them. Exercise of free speech and consumer choice is a freedom I'm not sure why you hate so much.

'other than the usual lazy blame big corps'

You are aware that Prof. Cowen wrote a love letter to big corps, right?

It does seem an odd thing for libertarians to complain about. It is their perfect world. It is a contract freely entered by independent parties.

In libertarian contract world wouldn't everything be labeled this way ?

No. Libertarian contract world would be no different than the current world in this way.

In my country when you buy a consumer product you get "full title and ownership" and "undisturbed possession, so no one has a right to take the goods away or prevent you from using them." Your end End User Legal Agreements have no power over me.

IANAL, but I think there has been some ebb and flow on the enforceability of EULAs in the US.

If I recall correctly, Microsoft wanted all resale of used Windows software to be illegal, but it settled out that OEM software is "married" to its original hardware and can be transferred with it.

Steam is a site that sold $4.3 billion in computer games last year. They never used to have a refund policy, but now they do. That's thanks to Australian consumer law.

Oh, see also the "the right to repair"

Elizabeth Warren is on top of it!

Usually the deal with inkjet cartridges is using a clone cart invalidates the warranty. So buy the legit cartridges till the warranty runs out if you want to keep your guarantee. In the end people who buy legit carts subsidise the clone users (as the "real" price of the printer would be much more if there was no lock-in).

Prices should track costs otherwise you have all kinds of bad incentives beyond inkjet printers. Look at our health care system and its completely Soviet pricing system. Look at Google or Facebook's "free" products. The original argument against central planning was that their fake price system fails to adjust to supply and demand. The argument against our current system is more of the same. We don't have a shortage of towels because they are so cheap at Walmart. We have a shortage of Tork branded towels that is why they are so expensive. Gimme a break.

As Peter Thiel says, competition is for losers, look for monopolies. This gave me an idea for a toilet paper startup. Maybe I'll start the next unicorn!

Blog posts like this one make me wonder if Cowen is testing his readers to see if they are more interested in moral outrage than economics. Businesses that have lots of public bathrooms must choose the most economically efficient way of equipping them. I've never thought about a vendor owned paper towel dispenser, but I have thought about paper towels vs. electric blowers. Why do some businesses use electric blowers and some use paper towels? I would think that there is one answer to the issue of which is the more economically efficient, which means some businesses are making faulty decisions. Indeed, if the bulk of businesses choose paper towels, then the businesses that choose electric blowers either are stupid or know something the others don't.

I've noticed lately the use of blowers that are about cock-high and blast air upwards. Presumably there must be some possibility of their blasting bacteria-laden small drops of water from your hands into your eyes. Therefore, I deduce, they must be owned by the manufacturers of antibiotics effective against eye infections. No?

Or, because you have to bend to use them, thus putting you at risk of backache, they are a cunning plot by physiotherapists to increase custom. That must be it!

I've notice the urinal water has gotten colder and deeper.

Serves you right for swimming in it.

What about the economics of public restroom attendants. I assume they are paid at least minimum wage but take the job primarily for the tips. Should one tip the attendant? I've been is some public restrooms with an attendant that are meticulously clean (the restrooms not the attendant). And the attendant seems happy to be there, smiling and greeting his "customers". Why don't all large public restrooms have attendants? As for small restrooms, it's a bad idea. I've been in small restrooms with an attendant and it's creepy.

The attendant is not there for you. He's there to keep vagrants and addicts out. Its ugly when there are dirty needles and blood and vomit spattered everywhere.

The Eula writer is quite smart. He can disguise the shutouts and reproduce it also. The justice of this case will be looked after by all. If you want to receive a research paper on similar topics then you can use this site : pay for legal research paper.

To answer Vincent's question about enforcement: Tork doesn't sell product direct, it sells through distributors, and the distributors enforce by noticing whether you stop buying product before the end of the contract period. These dispensers are installed in businesses that buy a lot of paper towels. I doubt a distributor would ever pull dispensers from a customer that "violates" the EULA, though: these are commercial accounts that buy other products in high volume, often for convenience from one vendor who delivers for free if you meet a minimum, and trespassing on a customer's property to remove paper towel dispensers is not realistically an option.

So this is what we've come to??? What's really noteworthy is that this blog is now beginning to resemble a tabloid.
Really, who cares???

I don't see the issue - if you read the notice, the dispenser is owned by Tork and provided gratis so long as you use Tork products. Why would anyone expect Tork to give you a free dispenser to use a competitor's products? If you don't like, buy a dispenser to use whatever product you want.

Exactly. But hey, Ty doesn't have the Mueller Report to take up his time any more (DO NOT MENTION THE MUELLER REPORT) so he has to point out how "depressing" it is that Tork offers a discount on paper towel dispensers.

Such is life in Trump's America, dontcha know.


Much happier to think about lemonade stands, am I right?

The underpants gnomes put that extra "not" in there, I swear.

Yes, Rob42. This says more about the culture that is Harvard than it does about the "legal culture". Next thing you know those beer companies will be criticized for demanding that the equipment they provide gratis to bars can't be filled up with competing beer brands.

What this actually says about the "legal culture" is that there is actually something remaining of the freedom to contract. Apparently, those Harvard folks want to change that.

You have a point. The article presents this as a case of "shutting down the competition" which obviously it is not.

I'm on the this is totally reasonable side. Really, Tork is selling a service: keeping the dispensers full all the time. Incidentally, they need to provide a dispenser--piling up rolls of paper, or just stacks of C-folds invites theft.

The Verge is an outrage machine, much like Recode, its sister site.

If you want vendor lock in, check out Ecolab. Ah, but Harvard librarians do not go looking around in the janitorial supply closets of restaurants.

This is a simple contract arising from voluntary exchange. There are plenty of alternatives to Tork dispensers for sophisticated purchasers like the hotels where Harvard academics attend conferences.

If Overholt were to exercise his academic curiosity and actually talk to the hotel manager, he would probably find this EULA way down the list of concerns. Premises liability and worker's compensation claims probably rank much higher, so if academic economists are looking for a particular legal sector to mine for commentary, tort and worker's comp are more fertile but apparently less interesting.

re: "forbids the people who have to refill this Tork dispenser from using rival, non-Tork products" in proper English would read, "forbids the people who have to refill this Tork dispenser to use rival, non-Tork products."

As previous comments have noted, there could be perfectly valid business reasons for Tork wanting to operate this way. Aren’t you generally libertarian? Let Tork and its customers decide what works best for them. In any case, whether or not you like this business model, it’s an example of business culture, not legal culture. Don’t blame the lawyers.

This really isn’t unusual (and you can skip to point 6 for why). This is referred to by the original poster as a EULA, but is more like a consumables contract attached to a lease, similar to those used for major equipment purchases (printers, medical equipment, etc).

So, here is a description of the tissue/hygienic paper market so people don’t get all complain-y about the article or the fact the article was posted, or both.
This is not an endorsement, it's just a description, though I think it says just as much about business conditions as it does about legal culture (point 7).

1. The paper tissue market is highly competitive, with a relatively small number of players, including SCA/Essity (Swedish, owner of Tork), Kimberly Clark (US, owner of Kleenex, etc.), Georgia Pacific (US, owned by Koch), Asia Pulp and Paper (Indonesia, owned by the Widjaya family conglomerate).

2. Establishing a paper manufacturing operation requires large amounts of capital. You need access to tree fibre, pulp processing, paper manufacturing and, eventually, marketing and distribution.

3. Different companies have different approaches. Some are vertically integrated (SCA, APP) and all parts of the chain. Others (Kimberly Clark) have moved away from that, and buy specialty pulp (‘fluff pulp’) for tissue paper on the global market, and make their products in their own tissue plants.

4. There are different segments to the market. This includes: the away-from-home (AFH) market, supplying offices, businesses, hotels, etc; the retail market (Kleenex, and ‘private label’ brands, etc); government procurement (military, hospitals, etc.)

5. Per capita hygienic paper consumption rises very much in line with GDP per capita. Poor countries do not use tissue or paper towels. Lower-middle and middle income countries have changed the market for tissue and paper towels over the past two decades. If you can imagine:
a) a decent percentage of the Chinese population moving from using a hose and no paper to toilet paper every day;
b) the increase in the amount of paper towel and tissue that gets used in public hospitals increasing as poorer countries get wealthier and spend more on public health;
c) how changes in demographics, particularly increased life expectancy (aged care, incontinence) increases the use of paper towels/tissue as countries get wealthier.

6. Away-from-home market consumables contracts are not particularly unusual for the owners of public spaces, as where you would expect a conference to be taking place. A company like Live Nation owns around 70 large concert venues around the US, which are used on a nightly basis by drunken patrons. Every bathroom needs to have paper towel/toilet tissue refills constantly. The dispensers need maintaining and filling, and can be damaged by drunken and rowdy patrons. What makes more sense for the venue owner? At one end, separate procurement processes for maintenance, etc., or at the other, a completely integrated solution that monitors equipment, consumables, inventory and delivery?

7. This brings together the points in 1, 5 and 6. The tissue/paper towel market has flattened in most developed countries, alongside GDP growth, life expectancy and population growth. And it’s not just a mature market, it’s a mature industry in which consolidation has taken place. Companies such as SCA/Tork have for the past decade or more been looking for ways to increase maintain revenues and profitability in developed world markets. This has become more acute as printing (e.g. newsprint) has declined over the past few years. Lease arrangements for equipment and consumables have been one way of approaching this.

"From the twitter comments: the paper towel company owns the dispenser and provides it for free. In exchange you have to use their towels."

There's lots of room for brand extension here:

1. Someone owns the car; you may only use their branded fuel in it.
2. Someone owns the refrigerator; it may only be used to store their branded foods.
3. Someone owns the TV; you may only watch their branded content on it.
4. Someone owns the computer; you may only run their branded software on it.
5. Someone owns your life-critical medical device; you may only use their branded batteries in it.

And, yes, these are all connected devices; they can and will detect and report any violations. They may also protect against further violation by refusing to function until/unless you pay up (including any additional fees due for violating the EULA, of course).

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