MagicJack SLAPPed with $50,000 penalty

I’ve been running a series of articles about Microsoft’s End User License Agreement – particularly the Win7 EULA – in Windows Secrets Newsletter. Microsoft’s EULA is hardly a paragon off clarity and fairness, but it pales in comparison to MagicJack’s.

Back in April 2008, Bob Beschizza at Boing Boing posted a short review of MagicJack’s EULA:

[The EULA] not only has one agree to ads with its paid-for system, but claims that the ads are necessary for it to work. It will also snoop on your calls to target ads more accurately, and has you sign away your legal right to take it to court if it defrauds or otherwise harms you. Delightful.

Neither the EULA itself, nor any other privacy or legal information, can be easily found at its homepage. It’s not even provided at the point of sale, where one enters credit card info, email and street addresses as such, so as to gain access to the service and have your MagicJack dongle delivered. I found the EULA’s URL through Google.

MagicJack took umbrage, and sued Boing Boing for defamation. Fast forward a year, and MagicJack not only lost the lawsuit, it was hit with a $50,000 penalty for what amounts to a frivolous lawsuit.

Fascinating wrap-up on the Boing Boing site.