Turtles all the way down: back to back terms of service

A couple of my clients have briefed me on scenarios where they operate an end-user facing service which operates, partly or wholly, on or through a service offered by a third party provider (typically overseas). An example of this sort of arrangement is the following illustration:

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Product and services developers are increasingly aware of the importance of having adequate terms of service on their sites because they realise that those terms of service form an important part of their legal relationship with their customers or users. What they frequently overlook are the terms of service that their infrastructure providers apply to their services. These infrastructure providers may include Facebook, Amazon Web Services (S3 for storage or EC2 for cloud computing solutions, for example) as well as 3rd party application stores like the iTunes App Store, the Ovi Store or even the Android Marketplace.

The typical scenario is a company that may rely on storage or computing resources either in the cloud or simply operated by someone else. in circumstances like these it is important to not only ensure that your customer facing terms of service or use are properly drafted and implemented but also that you are fully aware of the terms of service that applies to your back-end provider’s service.In the example of an application developer, the developer needs to understand and be comfortable with the terms that not only govern the development and submission of applications to the relevant app store but also terms which may apply to the application’s sale on the store. Those terms may not always be in line with the developer’s preferences or even the developer’s own terms of service which it may publish on its site and intends to govern its relationship with its customers.

When it comes to those infrastructure providers developers may rely on to host, sell and distribute their products or services, their terms may not necessarily deal with sales specifically but they do often deal with the types of content that may be uploaded to and stored on their services. While it is easy to take it for granted that these infrastructure providers’ terms are benign or otherwise in line with your own preferences, they may not be and falling foul of these terms of service can have profound effects on your business, particularly if the product is removed or the service discontinued.

Bottom line here is that as a product or service developer, you should ensure you have a good set of terms for your customers or users and you should pay careful attention to the terms your providers impose on you, preferably before you launch your product or service.

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