Treasury Imposing “Terms of Use” to Access TARP Data

by

In an astonishing move, the Treasury Department is requiring users to agree to “terms of use” before they can access and download TARP Transaction Reports in spreadsheet format. This requirement undermines the rationale for releasing the data, may implicate federal law, and is simply foolish. It also sets a bad precedent.

The TARP Transaction Reports, which contain detailed information on the government’s Wall Street bailout, are available in PDF format going back to November 2008. Only now are they being published online in a much more useful spreadsheet format, known as XLSX, thanks to President Obama’s Open Government Directive. The Report accompanying the Directive lauds the release of these weekly transaction reports as “improving transparency of federal bank supervisory activities as well as the investment activities of financial institutions.”

The “terms of use” that accompany the TARP reports, reproduced in full at the bottom, require users to:

  • Affirm that they have read and understood the site’s privacy policy and disclaimers,
  • Acknowledge that the terms of use may be modified at any time, which the user agrees to accept,
  • Clearly cite Financialstability.gov on all reuses of data accessed or retrieved from Financialstability.gov,
  • Clearly state that neither Financialstability.gov nor the U.S. Government vouches for the data or analyses derived from the data after it has been retrieved from the website.

Users who refuse to click “accept” are not permitted to download the data.

Rationale for releasing the data

The rationale for releasing the data, according to the Open Government Directive, is to “break down barriers to transparency, participation, and collaboration between the federal government and the people it is to serve.” The availability of the data thus far — in PDF format only — has facilitated clever efforts, like those undertaken by SubsidyScope*, to investigate and analyze how TARP money is being used.

Making the information available in a spreadsheet, and not just a PDF, would likely save SubsidyScope hours of data entry, and open up the data to many others who don’t have similar resources to transform the data into a usable format. However, the government’s imposition of these terms of use puts a stumbling block in front of those efforts. If the government can modify the terms of use at any time, they can control how the information can be used. Forcing people to extract data from the PDFs, for most people, effectively makes the data unaccessible. This is antithetical to transparency, participation, and collaboration.

Federal law and government data

I am far from an expert on intellectual property law, but there seems to be a fundamental contradiction here that arises from the intersection of the Open Government Directive, copyright law, and the terms of use.

Federal law prohibits the government from copyrighting “any work of the United States Government.” It is the copyright that gives the owner of information the right to control how a work is published, distributed, and adapted. The government’s terms of use acknowledges that no copyright can be claimed.

Nevertheless, the government asserts that it has the right to control how the data is used, with terms changeable at its whim. It does so by creating a contract of adhesion: the user has no opportunity to negotiate over the terms of the contract. Essentially, the government has created an “end user license agreement” more typically used by software companies.

I do not know if this is legally permissible. The data is in the public domain; can the government retain control? This raises serious questions, and goes against the spirit behind both the Open Government Directive and copyright law’s government information exception.

Also, there are questions of enforceability. For example, suppose user Adam downloads the file and posts it to his website. User Bob then copies the file off of Adam’s website and transforms it. Is Bob bound by the government’s restrictions on Adam? Under the current terms, Adam should require Bob to cite Financialstability.gov, but that’s about it. This is silly, and creates unnecessary confusion.

This restriction on data use is foolish

As noted above, tefore the government made available TARP information in spreadsheet format, it did so in PDF. The PDFs are not subject to terms of use restrictions. The spreadsheets and the PDFs contain the same data, just encapsulated in different formats. Clever folks, like those at SubsidyScope, merely enter the data from the PDFs into their own database. This is not a trivial effort: it takes takes much, much longer to make the data usable, but the consequences are the same. Why should the government treat the same information, just made available in different ways, differently?

My best guess is that the government may be authenticating the PDF files, but not the spreadsheets. The authentication would allow users to know the “provenance” of the information, in a similar fashion to how art dealers verify the authenticity of paintings.

If this is the reason behind the restrictions, it is unnecessary. The government could authenticate the spreadsheet data, just like the PDFs, obviating the need for the terms of service. Or, if it chooses not to authenticate the data in spreadsheet format, a simple warning or note to the user would be sufficient. The restrictions on the use of the data go far beyond that necessary for authentication.

Additionally, requiring users to agree to terms of use that they must click through each time impedes the automated gathering of this information. The whole point of putting TARP information online in database format is to make it easier to share, but the user agreements thwart this.

Setting a precedent

In the coming weeks and months, the government will likely make available a tremendous amount of data to the public in formats that encourage the use, analysis, and transformation of the underlying data. This term of use agreement is unwise from a policy perspective, but hundreds of term of use agreements would be a disaster for open government. The administration should set consistent policies that address the questions of authentication, the needs of the agencies to avoid liability for disclosures (if any liability exists), and most importantly ensures the broadest possible public access to the information. And it should do so in consultation with the public.

Terms of Use December 9, 2009

This terms of use agreement (the “Agreement”) governs your use of the data (the “Data”) available through this FinancialStability.gov Web site (the “Site”). You acknowledge that you have read and understood the Site’s Privacy Policy, available at http://www.financialstability.gov/about/privacypolicy.htm, including without limitation the Disclaimer of Endorsement, the Disclaimer of Liability, and Official Seal, Names and Symbols. In addition, you acknowledge that once the Data has been downloaded from the Site, the United States Government (including the Department of the Treasury) cannot vouch for its quality and timeliness, and the United States Government cannot vouch for any analyses conducted with the Data retrieved from the Site.

The Site may modify this Agreement from time to time, and your continued use of the Data and/or the Site constitutes your acceptance of any and all modifications.

No copyright may be claimed for any work on this Site that was created or maintained by any Federal employee in the course of their duties. Images and text appearing on the Site may be freely copied, however, with respect to the Data you agree:

1. To cite the date that Data was accessed or retrieved from FinancialStability.gov; and

2. To clearly state that “FinancialStability.gov and the United States Government (including the Department of the Treasury) cannot vouch for the data or analyses derived from this data after the data has been retrieved from FinancialStability.gov”.

This Agreement and the Data available through this Site is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity, by a party against the United States Government, its Departments, Agencies, or other entities, its officers, employees, or agents. Nothing in this Agreement alters, or impedes the ability to carry out, the authorities of the United States Government, its Departments, Agencies, or other entities, its officers, employees, or agents to perform their responsibilities under law and consistent with applicable legal authorities, appropriations, and presidential guidance, nor does this Agreement limit the protection afforded any information by other provisions of law.

By clicking on the “I Accept” button below, I acknowledge that I have read, understand, and agree to the above conditions.

* SubsidyScope is an initiative of The Pew Charitable Trusts’ Economic Policy Group, in conjunction with the Sunlight Foundation, its research and technology partner.

Categorized in:
Share This:
  • Miquel Chabaud

    Very nice post…

  • Doug Phillips

    Daniel,

    It’s an interesting question of contract law. The Terms of Use refer to themselves as a “terms of use agreement (the ‘Agreement’).” But the so-called Agreement contains no promise by the Treasury Department to do anything. On the contrary, it states that it creates no “right or benefit, substantive or procedural, enforceable at law or in equity, by a party against the United States Government . . . .”

    In general, when an agreement involves an exchange of promises, both sides must make real, potentially enforceable promises for the agreement to give rise to a binding contract. This is known as “mutuality of obligation.” Like many contract law doctrines, it has its exceptions and its detractors. Some say it is just another way of expressing the consideration requirement. Others say it is an added requirement. It’s closely related to (if not the same as) the illusory promise doctrine. If one of the parties makes a promise that is essentially meaningless, there is no contract. If I promise that I might give you my iPod if I feel like it in return for your promise to pay me $25, there is no contract because I have not given you a real promise that is capable of enforcement.

    It’s true that the mutuality doctrine does not apply to unilateral contracts. A unilateral contract would be one in which Party A promises something of value if Party B does something for Party A (returns Party A’s dog, etc.). The promise may not be specific to Party B (it could be an advertisement addressed to the public). Party B does not provide a promise in return. Rather, Party B performs (finds and returns the dog). Because Party A is *trading a promise for performance*, mutuality of (promissory) obligation is simply not an issue. The contract is formed through Party B’s performance, and if Party A does not fulfill the promise, specific performance can be ordered (if otherwise appropriate), so performance by both parties can be required.

    Even if we assume there is an implied promise by Treasury to make the spreadsheet available, we still have a case in which Treasury (implicitly) promises to do something (provide access to the spreadsheet) in return for the user’s promise to do something (comply with the terms of use, etc.). In other words, Treasury and the user are *trading promises*. At the time the user clicks “I accept,” before access has occurred, we have a contract (if at all) that consists entirely of an exchange of promises. But there is a lack of mutuality because, according to the terms of the Agreement, the user has no legally-enforceable right to performance of Treasury’s implied promise (if it even made one). And as you point out, there’s no license being granted here, because there’s no copyright (and it’s not at all clear that there would be any copyright in the data even if government employees had not created the work in the course of their duties). So there’s no license grant that would furnish mutual obligation (or consideration).

    I’m not suggesting that most EULAs would fail for lack of mutuality. Most EULAs do grant licenses and say that the licensee is authorized to use the software in some way, even if only for non-commercial purposes, etc., and even though subject to various restrictions. So most EULAs do contain some sort of mutuality, even if very limited. But if Treasury cannot have any legal liability at all, then it would seem that any promise Treasury may make, express or implied, is illusory. In other words, at the point of putative contract formation (when the user clicks “I accept”), we have a putative exchange of promises (and therefore a putative bilateral contract) in which one side’s promises (if any) are explicitly stated to be unenforceable. That sounds like a failed attempt to create a bilateral contract, not like a successful attempt to create a unilateral contract.

    I guess you could say that, if the download really does begin after you click “I accept,” then the Treasury Department is giving performance in return for the promises by the user, so it’s a unilateral contract after all. Some scholarly writings describe EULAs as “reverse unilateral contracts.” But if you have a failed attempt at a bilateral contract, do you nevertheless get a valid unilateral contract just because a party ends up happening to do what it expressly disclaimed any obligation to do? Perhaps, but that sure takes us far afield from anything that’s written in the supposed Agreement.

  • Quick link to some further reading I did on the Paperwork Reduction Act, and how it could bear on these restrictions:

    http://blog.sunlightfoundation.com/2009/12/19/paperwork-reduction-act-both-irrelevant-and-overbearing/

  • Daniel Schuman

    Doug,

    I read this differently than you, but I am not an expect in contract law. And this is a tricky and probably unsettled area of the law.

    To me, it looks like we have a contract. (Perhaps we can rule out that this is a license because licenses are a feature of copyright law. The information is in the public domain; the government cannot assert copyright; hence it cannot be a license.)

    Under the common law, contracts have three elements: offer, acceptance, and consideration.

    Offer: the government is allowing users to download data.

    Acceptance: When the offeree clicks on the “accept” button (and downloads the data).

    Consideration:

    The offeror provides the data.

    The offeree agrees to be constrained from acting in a certain way — from using the data without giving credit, etc.

    By its face, the contract disclaims the creation of a rights, etc., coming out of the contract. But that doesn’t void the contract: one interpretation is that you get the data as is, with no warranties or guarantees or anything else as to its quality, usefulness, etc.

    Indeed, it’s hard to think of an instance where you would be able to go after the government here. All I can come up with is the instance where you agree to the contract and the file is not available to download. Then, perhaps — perhaps !! — you could make them perform by giving you the data.

    There are a lot of open questions here, and this kind of law hasn’t been settled uniformly by the Supreme Court.

    I’m trying to talk to an IP lawyer who can help shed some light on this. Thank you for commenting.

  • Doug Phillips

    The terms of use purport to be an “agreement,” but they include the following statement:

    “This Agreement and the Data available through this Site is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity, by a party against the United States Government, its Departments, Agencies, or other entities, its officers, employees, or agents.”

    In other words, it’s an agreement under which one of the parties (the government) has absolutely no obligations whatsoever. As a matter of contract law, such an agreement arguably cannot be enforced, because it lacks “mutuality of obligation.”

  • Daniel Schuman

    Two quick updates:

    First, according to our friends at SubsidyScope, there’s no watermark or other authentication on the TARP PDF files. So, there’s no distinction (except the format) between the PDF files and spreadsheet files.

    Second, there’s a great discussion of this topic taking place on our listserv. You can view the comments here: http://groups.google.com/group/openhouseproject/browse_thread/thread/c81261b6060bf0c

    Steve, I hadn’t considered the state contract pre-emption angle. This is incredibly interesting stuff.

    Regardless of the limits of what the law allows, I cannot see a good reason why the federal government should place these kinds of restrictions on this data.

  • Great article Daniel! Keep on this one.

  • Sadly, this approach is neither unprecedented nor illegal (at least in the context of the Copyright Act). Caselaw in the last couple of decades has had the effect of ensuring that the contract exists wholly independent of copyright law. Specifically, with respect to public domain materials, ProCD v. Zuidenberg (1996) held that contracts can limit rights on non-copyrightable works. The fundamental issue was whether federal copyright statute overrode (or “preempted”) state contracts. The court held that it doesn’t. The case also happened to speak to the question of whether a EULA or “shrink-wrap license” was binding. It ruled that it was. For more, google “copyright preemption” or “supercopyright”.

    Now, it is theoretically possible that one could make a stronger argument for preemption given the very explicit carve-out for the public domain in the Copyright Act… but I wouldn’t count on it.

    We have seen similar behavior from the government in the case of federal court records. The judiciary places terms of use on any records obtained via a fee exemption (used by academics, indigents, pro-bono attorneys, and pro se litigants):
    http://pacer.psc.uscourts.gov/announcements/general/exemptnotice.html