The Debacle Over Facebook's Terms of Use

About week ago Facebook changed its Terms of Use. Their Corporate Counsel, Suzie White, announced this on the company blog and explained what they had done and why in their minds the changes were necessary. This massive sweep up was to consolidate various documents into one central document and to “simplif[y] and clarif[y]” the terms and information contained therein.

They didn’t have to provide notice, but they did, and for that, I applaud them. You don’t have to agree to the terms, and they are non-negotiable. Use implies acceptance, and says so in the first paragraph of the Terms. If you don’t like that, you can go elsewhere.

We reserve the right, at our sole discretion, to change or delete portions of these Terms [of Use] at any time without further notice. Your continued use of the Facebook Service after any such changes constitutes your acceptance of the new Terms.

The new Terms document has some serious issues with the way it handles content that users upload. “Content is king,” as the old dot-com era adage states, and without content, Facebook wouldn’t really be all that. Why do we return to Facebook? Why do people spend inordinate amounts of time locked into the site?

Content.

We return to read about what our friends and family are doing. We check out their pictures from vacation. We comment back and forth over the most inane status messages. We used to engaged in Scrabulous tourneys, but of course, that was a copyright infringement. I’m sure something has replaced that in the past months.

So content brings eyeballs, and Facebook sells advertising to those eyeballs. That is how and where Facebook’s income stream resides. Advertising. Without content, that advertising stream would dry up. We post content and Facebook places advertising around it. We find that to be okay because the service is free and actually works pretty great. That seems to be a fair trade. I’ll look at the ads on occasion and might even click on one.

The Rub

So what happens with the content you post? Facebook, according to their new Terms, for all intents and purposes, owns it.

You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising, each of (a) and (b) on or in connection with the Facebook Service or the promotion thereof. You represent and warrant that you have all rights and permissions to grant the foregoing licenses.

This is the problem with contracts. Legalese and contracts are written in order to protect the interests of the individual (be it a person or a corporation, which is seen as an individual under the law) from legal issues. Contracts are supposed to stop people from going to court. Usually, these contracts are negotiated between two parties. When one term dictates the terms and you must accept (e.g. a software license, terms of use, etc.) you have what is, in effect, a contract of adhesion.

adhesion contract n.(contract of adhesion) a contract (often a signed form) so imbalanced in favor of one party over the other that there is a strong implication it was not freely bargained. Example: a rich landlord dealing with a poor tenant who has no choice and must accept all terms of a lease, no matter how restrictive or burdensome, since the tenant cannot afford to move. An adhesion contract can give the little guy the opportunity to claim in court that the contract with the big shot is invalid. This doctrine should be used and applied more often, but the same big guy-little guy inequity may apply in the ability to afford a trial or find and pay a resourceful lawyer.

The Consumerist and the Cnet have both taken the company to task [ 1 | 2 ] over this and it got the CEO to come out in an attempt to put out the fires. Mark Zuckerberg posted on the corporate blog saying that Facebook would never do anything of the sort and they just wanted to make sure they could deliver things appropriately to other users. The problem is that what Mark says here is not legally binding. The parol evidence rule clearly states that no matter what a party to a contract states verbally, the written contract is the determining factor. The Terms of Use, constituting the contract between you, the user, and Facebook, are the only things that matters. Let’s look at some examples:

The Musician

Effectively, as a musician, if I post an mp3 on Facebook of Juniper Lane’s new song “Don’t You Give Up”, and it becomes a big hit, Facebook can make money off that and I can’t say squat about it. Although, if it were a big hit, I’m sure my record label would take Mr. Zuckerberg, et al to the bar in short order and have more paperwork filed in the first 24 hours than most people see in their lifetime.

The Photographer

Let’s use a more common example. You’re a decent photographer. You take a picture. Facebook likes it. They use it commercially. You’d get paid right? Nope. That nifty little phrase “including commercial or advertising” covers them in that. You’re simply out of luck. All for uploading a picture via Facebook to show your friend.

The Reality

Most of us aren’t a record label, or Facebook, or have deep pockets for legal fees. We’re people. In modern courts, it comes down to paperwork. A friend of mine, working as a paralegal in downtown DC, described it as “it’s not who’s right, but he whole files the most paperwork that wins.” With things such as “boxcar discovery”, where a side will deliver, in effect, a warehouse of paperwork to go through, it’s almost impossible to take on a company like Facebook. WHile this can go in both directions, Facebook could simply bury a Plaintiff in an excess of paper, unending in the reply to simple requests for production.

So my challenge to you, Mr. Zuckerberg, et al: Say what you mean, exactly, in your terms of service. Strike overreaching phrases such as “including commercial or advertising” and remember that those people you have as your users provide every penny of your current valuation. Start driving them away, and you may have larger problems than content lawsuits on your hands.

UPDATE Facebook has decided to revert to their old Terms for the time being and established a public working group entitled the Facebook Bill of Rights and Responsibilities group. THis already has over 30,000 members but sadly already has drivel in the discussions of “Can someone give me one logical reason to believe in God?”

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