If I had to pick one iconic line spoken by Darth Vader in the Star Wars franchise, it would be this one.
The confident evil of a villain who calmly acknowledges that the deal struck with him is changing and there is nothing that can be done about it strikes a chord. What’s odd is that we don’t seem to want to acknowledge that this is precisely what is going on across the world of IoT devices that are updated and changed after the purchase of a device has been made.
Weeks ago, we discussed a pilot program from Samsung to inject advertisements onto the screens of its smart fridges. Based on public feedback, the pilot program went over like a fart in church, with many people complaining that this was a material change to a purchased product with consumers having to jump through hoops to not have to suddenly suffer an advertisement barrage. This wasn’t the deal that customers made when they bought their fridge.
Samsung’s response has been Vader-esque: “I’m altering the deal. Pray I don’t alter it further.” What was a pilot program is now an official update from the company, with the ad program going live this week.
The ads will be shown on Samsung’s 2024 Family Hub smart fridges. As of this writing, Samsung’s Family Hub fridges have MSRPs ranging from $1,899 to $3,499. The ads will arrive through a software update that Samsung will start issuing this month and display on the fridge’s integrated 21.5- or 32-inch (depending on the model) screen. The ads will show when the fridges are idle and display what Samsung calls Cover Screens.
The software update will also introduce “a Daily Board theme that offers a new way to see useful information at a glance,” Samsung said. The Verge reported that this feature will also include ads, something that Samsung’s announcement neglected to state. The Daily Board theme will show five tiles with information such as appointments and the weather, and one with ads.
It will be interesting to track sales of these fridges over time. I don’t believe that most people want ads showing up on their fridge. I believe that if people are informed that their fridge will advertise to them to generate revenue for Samsung, most will be less likely to buy the product. Sales numbers will demonstrate whether I’m right or wrong.
Which is entirely besides the central point here: if I exchange money for a product, the product ought to be mine. I shouldn’t have to jump through hoops and lose out on product features simply because I don’t want to be your product for advertisers.
Samsung fridge owners can also opt to avoid the latest software update altogether. However, they would miss out on other features included in the software update, such as a UI refresh and the ability for the internal camera inside some fridges to identify more fruits and vegetables inside the fridge.
Is there any doubt that the ability to opt out of this will eventually be pared back as well? And is anyone going to do literally anything to protect the consumer from this sort of trespass into already-bought products.
Or are we just going to let Vader alter the deal and pray he doesn’t alter it further?
BestNetTech has long lamented how in the modern era, you don’t really “own” what you buy. That game console, smart lock, or smart refrigerator can quickly become less useful (or completely useless) with a firmware update, bankruptcy, or addition of annoying subscription paywall.
The problem is particularly bad when it comes to digital rentals. In streaming video, you often have the option to “rent” or “buy” a video. But the latter is misleading given you don’t really “own” the purchase; you’re given a license — subject to the whims of an amoral, giant corporation — that can be revoked or changed by profit-seeking executives with an eye on enshittification.
That recently appears to have gotten Amazon in trouble via a new lawsuit that alleges that Amazon is misleading consumers by misrepresenting the word “buy.” From the lawsuit:
“On its website, Defendant tells consumers the option to ‘buy’ or ‘purchase’ digital copies of these audiovisual works. But when consumers ‘buy’ digital versions of audiovisual works through Amazon’s website, they do not obtain the full bundle of sticks of rights we traditionally think of as owning property. Instead, they receive ‘non-exclusive, nontransferable, non-sublicensable, limited license’ to access the digital audiovisual work, which is maintained at Defendant’s sole discretion.”
Ars Technica notes that a similar lawsuit was filed in the same court back in 2020, but was dismissed in 2021 for lacking standing. The website notes this new lawsuit stands a slightly better chance of success thanks to a new California law that bans the the sale of a “digital good to a purchaser with the terms ‘buy,’ ‘purchase,’ or any other term which a reasonable person would understand to confer an unrestricted ownership interest in the digital good, or alongside an option for a time-limited rental.”
The fight has parallels to efforts to hold telecom giants accountable for abusing the dictionary definition of words like “unlimited,” by promising users unlimited data, then imposing restriction, caps, and overage fees to drive up profits.
Such cases generally struggle due to companies that hide such restrictions in overlong fine print, then successfully argue this constitutes an effective and clear warning for consumers. In this instance, plaintiffs have to prove that it was clearly communicated to them that they would enjoy permanent, restriction-free “ownership” in perpetuity, and were harmed when that ownership was taken away.
Of course, it is also terrible policy. While there are sometimes compelling arguments that companies should be in public hands, like for utilities, where there is inadequate competition otherwise, or perhaps companies about to fail, where equity in exchange for a publicly-funded bailout might make sense. But none of those arguments apply to a private company that, wobbly though it may have been recently (as are so many), nevertheless remains capable of participating in a competitive environment. Instead, in this case all the reasons not to have the state control the means of production apply, and none of the reasons why an exception should ever be made come anywhere near to it.
Here it is simply Trump openly helping himself to a share of a going concern.
Trump: "I said, 'You know what? I think the United States should be given 10% of Intel.'"
Because he thinks he can, for this company and many others.
Q: During the campaign, you called Kamala Harris a communist, but the Biden-Harris admin never called for nationalizing a private company like you're proposing with Intel. Is this the new way of doing industrial policy?TRUMP: Yeah. Sure it is. I want to try to get as much as I can.
But he can’t. Because (among potentially lots of other reasons) it’s a taking.
The Fifth Amendment of the Constitution closes with the prohibition, “nor shall private property be taken for public use, without just compensation.” And yet, if Trump were to succeed with this arrangement vis a vis Intel, that foreclosed scenario is exactly what would be happening.
First, there has been no actual compensation. Details are slowlyemerging (and note, if this arrangement were truly above board then everyone would have been very clear on what was happening and why from the outset, so this sketchiness just adds to why it’s unconstitutional, if for no other reason than it obviates any notion of fairness) but it appears that Trump wants to convert $11.1 billion in grants and pledges that Intel was eligible for (and possibly already paid, or at least due), into the “payment” for an equity stake in the company.
About $7.8 billion had been been pledged to Intel under the incentives program, but only $2.2 billion had been funded so far. Another $3.2 billion of the government investment is coming through the funds from another program called “Secure Enclave.”
But this purpose is not what Congress authorized the grant payments for, which means that Trump would effectively be impounding that money and using it for a purpose other than what Congress had earmarked it for, even if nominally still involving the same recipient. For example, Congress, with the CHIPS Act (the apparent source for at least some of these grants), wanted to support American companies so they could continue to effectively compete in the world as private enterprises. Not buy them.
The deal also got the government for the stock at a discount, turning that money to which Intel was entitled to into equity in greater proportion than the closing stock price would have equated to.
The U.S. government is getting the stake through the conversion of $11.1 billion in previously issued funds and pledges. All told, the government is getting 433.3 million shares of non-voting stock priced at $20.47 apiece — a discount from Friday’s closing price at $24.80. That spread means the U.S. government already has a gain of $1.9 billion, on paper.
Even if Trump had the authority to snatch back any money from the government Intel was due by converting it into payment for the equity, he wouldn’t have the authority to demand the discount. All the equity he obtained above what the share price would have equaled he got for free, or, to put it in Constitutional terms, without compensation.
But even to the extent that some form of compensation could be construed from the arrangement, nothing about it qualifies as “just compensation” because there’s nothing just (or compensating) about forcing someone to do a deal that gives up something they had of value at the point of a gun, either literally or proverbially. Here Trump has been very busy very loudly and publicly loading up the metaphoric gun with groundless pressure against the CEO and the company if they did not do this deal. And everyone knows how his pressure is far from an idle threats given how he has already come after other people and their businesses when he’s set his sights on them.
That the CEO or the company board might have somehow “agreed” to the deal, or even proposed its terms in the face of that pressure, does not make what is happening here any less wrongful. If making someone an offer they effectively can’t refuse could count as appropriate compensation then the Sopranos would have been a show about a Fortune 500 CEO, not a wanted criminal. You can’t do legitimate deals by extorting people. Whatever results is not a deal, and certainly not fair. Which means there cannot be “just compensation.” And without “just compensation” it means that the equity Trump has helped himself to is just an unconstitutional taking.
Perversely, however, the one reason why it might not be a taking is that the likelihood that this equity position will be for “public use” benefiting the public treasury seems small. Trump’s idol Putin is infamous for redirecting shares of previously public industry to cronies, allowing them to become unfathomably rich and powerful oligarchs by co-opting public resources and the benefits of earlier public investments, and there is no reason to believe, based on everything Trump has said and done to date, that Trump won’t try to emulate those kakistocratic tendencies. Nevertheless, because he is ostensibly using public power to further this scheme, it is likely still a taking, because at least for a brief moment there is at least the pretense that the entire enterprise is for the public benefit. It is that presumption that gives him the ostensible power to even attempt it.
But, as Trump regularly demonstrates, not every exercise of lawful power is itself lawful. And this move to seize a portion of a private company is no exception. It is just as much a taking as any case that has ever been litigated, if not more so, given the sheer brazenness and scale. And arguably not the first even this term. For instance, there was the US Steel deal, where Trump obtained a “golden share” as a condition for the merger. And there was his extraction of promises by law firms for free legal work they otherwise had no obligation to provide as a means of avoiding his threats. There were, of course, other constitutional infirmities with the latter deals, aside from the potential takings issue, but those infirmities reflect the modus operandi of his takings based on unconstitutional threats against his targets, until they submit to his demands.
With the US Steel “deal” the quid pro quo of the “golden share” exchange was a little more subtle, where that offer was a means of turning a government “no” to a “yes, but only if…” But there is still something irredeemably corrupt about this sort of bargain, where a company has to barter part of itself to the government for a policy result. The takings clause protects not just those that the government might take from but the public that also has an interest in making sure that the government strikes whatever deals it does fairly.
Which is one reason why it shouldn’t matter for takings purposes if the deal at least appears to produce some value for some, because they may not be all the people who are supposed to be protected from this form of government abuse. But the other reason is because none of these “deals” that Trump is doing is fair, and that some may have somewhat benefited cannot make them fair. Such is the nature of duress, because even if a seemingly good deal results it may still not be as good a deal as the taken party should have been able to benefit from had there been no duress. Duress precludes deals from ever truly being fair, which we can see here, with Intel, where a government ownership interest has resulted after an abuse of government power. The result is inherently tainted, because it is a deal done as an attempt to avoid an even greater cost instead of a result that is truly fair for the company. As this deal obviously isn’t, because it is hard to imagine that anyone could think a deal exchanging money the company was already entitled to for equity would be anywhere near as fair as a deal as being able to keep the promised money without having to surrender anything at all.
This isn’t going to stop happening unless governments finally get involved to do their most basic job: protect their citizens. This habit among digital and tech companies of selling a thing only to claw back some of the function of that thing after the purchase is both rampant and, frankly, getting ridiculous. It’s bad enough when a company goes fully kablooey, has to shut down all their backend servers and gear, and renders their products useless. That sucks, there are ways around it, and it shouldn’t be allowed, but it’s quite different than perfectly healthy companies selling a product that has features and capabilities out of the box, only to claw back those capabilities and either shut them down or stick them behind some subscription paywall.
And that latter of those examples is what is happening again, this time from Futurehome, which makes a series of smarthome IoT products.
Launched in 2016, Futurehome’s Smarthub is marketed as a central hub for controlling Internet-connected devices in smart homes. For years, the Norwegian company sold its products, which also include smart thermostats, smart lighting, and smart fire and carbon monoxide alarms, for a one-time fee that included access to its companion app and cloud platform for control and automation. As of June 26, though, those core features require a 1,188 NOK (about $116.56) annual subscription fee, turning the smart home devices into dumb ones if users don’t pay up.
“You lose access to controlling devices, configuring; automations, modes, shortcuts, and energy services,” a company FAQ page says.
You also can’t get support from Futurehome without a subscription. “Most” paid features are inaccessible without a subscription, too, the FAQ from Futurehome, which claims to be in 38,000 households, says.
That would be potentially nearly a decade of a bought product working one way, only to have its core functionality tucked behind a subscription paywall on the whim of the company. This is one of those situations that, and I don’t care what country you live in, should elicit the common sense reaction of: this shouldn’t be fucking legal. But, due to the apathy of government and the steady erosion of anything remotely representing true consumer protection, this sort of thing is happening more and more frequently.
And it’s not as though all of this functionality requires support from backend company assets, either. Some do, sure, but some of the features that suddenly don’t work appear to have nothing to do with centralized corporate servers or services.
I can understand to some extent that they have to do it for services that have ongoing expenses, like servers (even though I actually think it’s their problem, not mine, that they didn’t realize this was a bad idea when they sold me the solution), but a local function that only works internally in the equipment I’ve already paid for shouldn’t be blocked behind a paywall.
So what’s the explanation here? Simple: money! Futurehome recently went through bankruptcy and is blaming that situation for why it needs to suddenly create a cash percolator among the customers that already bought its products with the expectations of the functionality with which they were sold. As always, the company has insisted the subscription fees will allow it to remain solvent and, as the evergreen promise goes, “fund product development, and provide high-quality support.” We’ve seen this movie before and we know how it ends.
As you’d expect, some people are attempting to figure out how to make Futurehome products work without the subscription. Perhaps as a result of that, Futurehome shut down its own user forum in June. In addition, the CEO is complaining about how the company now has to invest time and resources to fight its own customers’ attempts to make the products they bought work like they did at the time of purchase.
Futurehome has fought efforts to crack its firmware, with CEO Øyvind Fries telling Norwegian consumer tech website Tek.no, per a Google translation, “It is regrettable that we now have to spend time and resources strengthening the security of a popular service rather than further developing functionality for the benefit of our customers.”
But is it as regrettable as your own customers suddenly finding out the thing they bought won’t work anymore because your company didn’t business well enough?
Here we go again. The idea that, at least in the realm of digital goods or IoT devices, we no longer own what we’ve bought has been a long-running theme here at BestNetTech. While the practice of pulling back features available upon purchase via firmware updates has been a regular occurrence in the video game console space, it’s also reared its ugly, anti-consumer head in the realm of everything from smart home devices, emotional support robots (yes, seriously), and even exercise equipment.
It seems like a simple concept that everyone should be able to agree to: if I buy a product from you that does x, y, and z, you don’t get to remove x, y, or z remotely after I’ve made that purchase. How we’ve gotten to a place where companies can simply remove, or paywall, product features without recourse for the customer they essentially bait and switched is beyond me.
But it keeps happening. The most recent example of this is with Echelon exercise bikes. Those bikes previously shipped to paying customers with all kinds of features for ride metrics and connections to third-party apps and services without anything further needed from the user. That all changed recently when a firmware update suddenly forced an internet connection and a subscription to a paid app to make any of that work.
As explained in a Tuesday blog post by Roberto Viola, who develops the “QZ (qdomyos-zwift)” app that connects Echelon machines to third-party fitness platforms, like Peloton, Strava, and Apple HealthKit, the firmware update forces Echelon machines to connect to Echelon’s servers in order to work properly. A user online reported that as a result of updating his machine, it is no longer syncing with apps like QZ, and he is unable to view his machine’s exercise metrics in the Echelon app without an Internet connection.
Affected Echelon machines reportedly only have full functionality, including the ability to share real-time metrics, if a user has the Echelon app active and if the machine is able to reach Echelon’s servers.
Want to know how fast you’re going on the bike you’re sitting upon? That requires an internet connection. Want to get a sense of how you performed on your ride on the bike? That requires an internet connection. And if Echelon were to go out of business? Then your bike just no longer works beyond the basic function of pedaling it.
And the ability to use third-party apps is reportedly just, well, gone.
For some owners of Echelon equipment, QZ, which is currently rated as the No. 9 sports app on Apple’s App Store, has been central to their workouts. QZ connects the equipment to platforms like Zwift, which shows people virtual, scenic worlds while they’re exercising. It has also enabled new features for some machines, like automatic resistance adjustments. Because of this, Viola argued in his blog that QZ has “helped companies grow.”
“A large reason I got the [E]chelon was because of your app and I have put thousands of miles on the bike since 2021,” a Reddit user told the developer on the social media platform on Wednesday.
Instead of happily accepting that someone out there is making its product more attractive and valuable, Echelon is instead going for some combination of overt control and the desire for customer data. Data which will be used, of course, for marketing purposes.
There’s also value in customer data. Getting more customers to exercise with its app means Echelon may gather more data for things like feature development and marketing.
What you won’t hear anywhere, at least that I can find, is any discussion of the ability to return or get refunds for customers who bought these bikes when they did things that they no longer will do after the fact. That’s about as clear a bait and switch type of a scenario as you’re likely to find.
Unfortunately, with the FTC’s Bureau of Consumer Protection being run by just another Federalist Society imp, it’s unlikely that anything material will be done to stop this sort of thing.
Belkin is the latest company to painfully demonstrate that you no longer own what you buy, and the whims of corporate executives can very often leave you with expensive paperweights.
In a recent statement to customers, Belkin says that it will no longer be providing support or software updates for the company’s Wemo “smart home” devices starting in the new year. About 27 affected devices, on sale since 2015 or so, will no longer receive security updates, work with smart home assistant services like Alexa, or be controllable via app.
Consumers who bought into the Wemo brand thinking they’d created a “smart home of the future” are instead stuck with a mostly useless (and quite dumb) pile of junk. For what it’s worth, a faceless Belkin communications professional claims to feel bad about it:
“We understand this change may disrupt your routines, and we sincerely apologize for the inconvenience.”
The writing had, at least, been on the wall for observant consumers. Belkin stopped selling most smart home tech in late 2023, shifting its focus to game console accessories. You might have noticed that was going to happen, and you might not have. You might be able to get “partial refunds” for products still under warranty, but you might not. Good stuff! Very innovative!
This tendency toward bricking perfectly functional electronics is fairly terrible for the environment as well, with organizations like iFixit noting that the United States alone disposes of 500 pounds of electronic waste each second, and USPIRG estimating that “a minimum of 130 million pounds of electronic waste has been created by expired software and canceled cloud services since 2014.”
We’ve talked about how, in the digital space at least, the concept of “ownership” has undergone a massive philisophical shift. It used to be that you would go out somewhere, buy a thing, and own that thing. When the product is digital, however, or if it is connected to the internet and subject to firmware and software updates that change the product post purchase, you never really own the product. In fact, according to most EULAs and the like, you merely “license” the product. That means the thing you bought on Monday may not be the product or service you actually get on Friday, if the manufacturer or maker decides to make a change. And the response you get from industry is a reminder that you didn’t buy a thing; you bought a limited license to a thing that can be altered, rescinded, or bricked at the maker’s whim.
It’s a dystopia that we’ve come to accept, unfortunately. But you get to a whole new level of absurd when you don’t actually own the license you bought, either. More specifically, when you buy a “lifetime license” to a VPN service, only to have the company be sold and the new owners yank that lifetime subcription from you without prior notice.
The new owners of VPN provider VPNSecure have drawn ire after canceling lifetime subscriptions. The owners told customers that they didn’t know about the lifetime subscriptions when they bought VPNSecure, and they cannot honor the purchases.
A copy of the email from “The VPN Secure Team” and posted on Reddit notes that VPNSecure had previously deactivated accounts with lifetime subscriptions that it said hadn’t been used in “over 6 months.” The message noted that VPNSecure was acquired in 2023, “including the technology, domain, and customer database—but not the liabilities.”
It gets worse. According to the new owners, they claim the sellers didn’t even tell them about these lifetime subscriptions and that usage and support requests for them were saturating the service, all sans any income for the new ownership. How true any of that is would be completely unknown to this writer, obviously, but it’s also besides the point. If the seller obfuscated usership in the sale, that should be taken up with the seller. The current owners claim they can’t do that because the costs of a lawsuit would outpace what they spent on the purchase to begin with. Which, hey, that sucks pretty hard if all of this is true, but I’m failing to see why that should keep in purchases made in good faith from being honored.
Unfortunately, the previous owner did not disclose that thousands of Lifetime Deals (LTDs) had been sold through platforms like StackSocial.
We discovered this only months later—when a large portion of our resources were strained by these LTD accounts and high support volume from users, who through part of the database, provided no sustaining income to help us improve and maintain the service.
We actually offered VPNSecure lifetime subscriptions in one of our own “Daily Deal” posts. There is a lot of disbelief floating out there about just what these new owners knew about these subscriptions and when they knew it. It’s important to note that checking the history of the VPNSecure website doesn’t reveal that lifetime subs were ever offered there. Instead, they appear to have been offered through third parties like StackCommerce, which is who BestNetTech partners with. When we asked StackCommerce directly about this whole fiasco, we were provided with this statement.
“As a marketplace, StackCommerce connects consumers with exclusive digital deals offered by third-party providers. While we strive to curate high-quality, long-term offers, we do not own or operate the products sold through our platform. In rare cases where a provider is acquired or discontinues operations, we unfortunately have no control over how those new entities choose to honor existing agreements. We understand the frustration this can cause and are actively working with impacted customers to offer support and explore possible solutions.”
Any real due diligence by the new owners should have uncovered all of this. If they didn’t do their jobs as part of the acquisition, well, sucks for them.
Again, how that translates into ripping away a subscription from a customer who bought them in good faith is beyond me. How those subs were discontinued without notice, with emails going out to those affected only after the complaints started rolling in, is also a valid question and a method for assuredly pissing people off.
VPNSecure could’ve potentially mitigated backlash by giving users more advanced warning of the changes and a longer opportunity to select a new subscription before deactivating their accounts. We can’t confirm if InfiniteQuant Ltd. knew about the lifetime subscriptions before making its purchase. However, the firm claims to have known about the subscriptions a few months after taking ownership, so it had ample time to warn customers before abruptly deactivating “dormant” accounts and killing the subscriptions of thousands of customers.
So if we don’t own what we’ve bought, and we don’t even own the licenses under the terms we bought them either, then what exactly are we getting whenever we hand over the money we’ve earned?
It’s no secret that Nintendo is among the most draconian actors when it comes to intellectual property. BestNetTech is rife with posts on the various ways the company has been a royal and overreaching pain in the ass on anything with even the most modest concern over copyrights, trademarks, or patents. From attempting to unmask anonymous internet denizens over leaks, to failed lawsuits against South American grocers over nonsense trademark concerns, to finding literally any reason to sue a competitor over patents that never should have been granted just because it can, the company simply never misses an opportunity to treat its own industry and fans poorly at the hands of its lawyers. This has even included threats to brick its customers’ consoles if they fail to agree to new EULAs after the console had been purchased.
That last one is particularly notable, as Nintendo is once again issuing a similar threat, but this time with a new EULA that outlines all the things, including legal things, that might cause Nintendo to turn your Switch or Switch 2 into a paperweight.
First spotted by Game File (readers may encounter a paywall), Nintendo has recently changed its online user agreement in multiple consumer-unfriendly ways just before the launch of the Switch 2. Chief among them: Nintendo asserts the right to render your console “permanently unusable” if it determines you’re in violation of the agreement.
Nintendo’s specific new phrasing, distinct from its prior EULA from 2021, is that “You acknowledge that if you fail to comply with the foregoing restrictions Nintendo may render the Nintendo Account Services and/or the applicable Nintendo device [emphasis mine] permanently unusable in whole or in part.”
So what might so offend the company that they would remotely disable the device you bought? Some of it is what you’d expect. Don’t circumvent its anti-piracy protections. Don’t pirate its games.
These still aren’t kosher (more on that in a moment), but then there’s this.
Publish, copy, modify, reverse engineer, lease, rent, decompile, disassemble, distribute, offer for sale, or create derivative works of any portion of the Nintendo Account Services.
The old EULA had some of this language, but it was inclusive of language that such acts had to violate local laws to be verboten. This new EULA includes no such language which, as PC Gamer rightly points out, is a pretty big problem.
The sections I most take issue with are the prohibitions on copying, modifying, or decompiling software—particularly as it no longer accounts for it being “expressly permitted by applicable law”—as well as hardware/software modifications “that would cause the Nintendo Account Services to operate other than in accordance with its documentation and intended use.”
No game or hardware modding, no extracting ROMs—something Nintendo continuously asserts we cannot do, even though it is a legally protected consumer right—and no dual booting to another OS.
Nintendo is once again asserting rights it doesn’t appear to have, at least in America. In what world can someone sell me a thing and then make the thing unusable because it doesn’t like a legal action I took with it? Do we own this fucking thing, or do we not?
Worse yet, the EULA makes it clear that Nintendo is judge, jury, and executioner on these matters. There’s nothing in the language about bricking your device that indicates Nintendo is going to go to any legal authority or third party before doing so. If it suspects you’re engaging in a forbidden (by Nintendo only) activity, the company can brick your shit.
So what happens when they’re wrong?
There’s also the very legitimate concern of the notoriously heavy-handed, litigious company acting on false positives. I don’t know what means Nintendo has to detect such activity and kill a console, but I’m getting a clear message: You spent $450 on this hardware, but Nintendo does not think you own it.
That there hasn’t been a bigger uproar over these changes is plainly absurd. They’re so anti-consumer as to be ridiculous and all of this is practically begging for interdiction from the federal government, assuming the Trump administration hasn’t hollowed out the government’s ability to protect its own people from this sort of thing.
But anyone buying a Switch 2 when its released is at risk of having an expensive paperweight otherwise. You’ve been warned.
We talk a lot here about the concept of “ownership” of what we spend money on, particularly as it relates to purchases that are digital or have some reliance on internet connectivity. Despite being related, those two categories are actually quite distinct.
On the one hand, you have situations where a company may go out of business, or a business may no longer “support” a product it sold, where backend infrastructure also gets shut down and results in sold products no longer having the same functionality or, in some cases, becoming expensive paperweights. Some advocate groups have already pressed the FTC to do something, anything about all of this, such that some consumer rights are conferred to the victims of this behavior.
Then there are the purely digital “purchases,” wherein the public is typically not actually buying a “thing,” but rather a limited license to access said thing. Video games, digital music files, and eBooks all come to mind here. Nobody has done all that much on that front, save for some platforms aiming to force sellers to disclose some ownership rights and some companies being a tad more public about how it isn’t actually selling “things” like the public thought.
Senator Ron Wyden appears to be interested in changing that. He has written to the FTC, urging them to require companies to be far more transparent before and during the sale of digital goods as to what ownership rights the buyer actually has.
Wyden’s letter, shared with The Verge, requests guidance to “ensure that consumers who purchase or license digital goods can make informed decisions and understand what ownership rights they are obtaining.”
Wyden wants the guidance to include how long a license lasts, what circumstances might expire or revoke the license, and if a consumer can transfer or resell the license. The letter also calls for the information “before and at the point of sale” in a way that’s easily understandable. “To put it simply, prior to agreeing to any transaction, consumers should understand what they are paying for and what is guaranteed after the sale,” Wyden says.
This simply isn’t a position that should come with much controversy. Consumers knowing what they’re actually buying based on clear and transparent language isn’t a big ask. Hell, it should have been considered table stakes from the beginning. And any pushback from anyone in the digital industries would be very, very telling.
Why would you want to fight back against a requirement that your customers know what they’re buying from you, after all?
“The shift from physical to digital goods presents some complex legal questions,” Wyden says in the letter. “One thing is clear, however: consumers deserve transparency about their ownership rights in digital goods. Guidance from the FTC on this issue will help ensure that digital goods sellers are aware of best practices and that American consumers can make informed buying decisions.”
This should be an absolute slam dunk of a request. And if some ground rules about disclosure can finally be put in place, perhaps we’ll finally have an end to the shock in some cases when a person’s purchases are suddenly whisked away without recourse.
We have been talking about the problem of ownership in the modern world for some time, particularly as it revolves around how digital or internet-reliant products are sold. It’s become such a prevalent problem that there’s something of a generic mantra for it: You don’t actually own the thing you bought. There’s a spectrum to this, though, which spans from the idea that digital video games are licensed rather than sold to companies either removing features sold with a product or suddenly hiding them behind a paywalled app, all the way up to companies going under and rendering products already sold to customers into useless bricks and e-waste as backend servers get unplugged.
None of these outcomes are good for the consumer, but that last category is the one that both creates the most visceral response and is the most plainly absurd. It also very much breeds distrust. You can see some of that in action when it comes to the latest example of a startup’s implosion bricking a product: Humane’s AI pin.
After launching its AI Pin in April 2024 and reportedly seeking a buyout by May 2024, Humane is shutting down. Most of the people who bought an AI Pin will not get refunds for the devices, which debuted at $700, dropped to $500, and will be bricked on February 28 at noon PT.
At that time, AI Pins, which are lapel pins with an integrated AI voice assistant, camera, speaker, and laser projector, “will no longer connect to Humane’s servers,” and “all customer data, including personal identifiable information… will be permanently deleted from Humane’s servers,” according to Humane’s FAQ page. Humane also stopped selling AI pins as of yesterday and canceled any orders that had been made but not yet fulfilled. Humane said it is discontinuing the AI Pin because it’s “moving onto new endeavors.”
Which is another way of saying that the company will be selling off all of its assets to HP and winding down completely. Hundreds of dollars have been spent on these devices by people and they’re just going to stop working. Completely. No refunds for the majority of customers, as they’re only being offered on purchases within the last 90 days. No open-sourcing of the product so that members of the public can stand up their own servers. Just… gone.
And while I will admit I struggle at times to feel a great deal of sympathy for people when they fall for a lot of the AI-hyped-up bullshit that is out there, people are pissed about this and justifiably so.
One Reddit user, for example, wrote on the Humane subreddit that they “feel like we’ve been duped.”
The announcement has also made some apparent users cynical about the intentions of the San Francisco firm, which former Apple executives launched in 2018.
“It’s truly a middle finger. Especially because there is no way around it due to the server reliance. I believe this was their plan all along. Sell and [get out],” one Reddit user said.
Similarly, another Reddit user said the lack of refunds and server access were “a blow” to early adopters, saying, “Humane won by selling. HP won a new tech. All consumers got fucked…”
The comment that sticks out to me is the one indicating that this was the plan all along. Now, I don’t believe that in its entirety. I’m certain that the folks at Humane didn’t want this exact scenario to play out. After all, last year the company was seeking a buyer willing to pay nearly $1 billion for the company. See? They didn’t get exactly what they wanted!
But creating a company to speedrun from an absurd initial valuation to a buyout by a larger tech firm isn’t exactly unheard of in Silicon Valley. Nor in many other places for that matter. And, while I doubt very much that any planning sessions at Humane involved someone saying, “And here’s where we fuck all of our customers completely by shutting down their devices, bwah ha ha!,” I have no trouble believing that this was a company created to be sold all along. And it sure does seem like the company didn’t have its own customers’ best interests in mind as it was seeking a buyer all along.
Humane also continued to push the pins despite reportedly seeking a buyer since May, and it gave AI Pin owners just 10 days to reckon with their expensive devices being bricked. In addition, the limited refund window seems like a slap in the face to people who were willing to spend extra money to be early adopters.
Here again we find that our laws simply have not kept up with the times. There needs to be some structure and rules around this sort of thing, such that the public is at least protected from buying a $700 product only to find out 91 days later that the product is gone and there is no refund coming. That such a situation is untenable is not a controversial opinion.
Maybe someone can take this up with the Consumer Financial Protection Bureau and… oh, yeah, never mind.
