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Facebook’s TOS Fumble

One big story of the day was Facebook’s new and improved terms of service which this Consumerist post flagged and which set off a firestorm of controversy:

Facebook’s terms of service (TOS) used to say that when you closed an account on their network, any rights they claimed to the original content you uploaded would expire. Not anymore.

Now, anything you upload to Facebook can be used by Facebook in any way they deem fit, forever, no matter what you do later. Want to close your account? Good for you, but Facebook still has the right to do whatever it wants with your old content. They can even sublicense it if they want.

What Was Facebook’s Mistake? Facebook could have avoided much of the controversy by providing its users some advance notice of the upcoming changes. As intimated by this CNET post, Facebook’s terms first saw the light of day in a Facebook blog post which was then noticed by Consumerist (and took off from there). Facebook could have probably avoided all of this (which probably will not amount to much anyway, but which makes Facebook look bad and somewhat exacerbates their trust issues with users) by giving its users a heads up. Better yet, it could have involved its users in the process. That may open up some practical issues when it comes time to enforce the terms, but it sure would have avoided the PR snafu. The real lesson from the Facebook TOS saga in my opinion: at least give your users the heads up on upcoming changes and if you want to be touchy feely about it, actually involve them.

What Did They Change? Initially I thought people were making a big deal out of nothing and incorrectly reading the new terms much more broadly than they are drafted. A big change that most people are (I think incorrectly reading) into the new terms is that Facebook is now claiming ownership of content which users upload. Facebook is just getting a perpetual license to the content so that if you delete your account they can continue to display the content. This isn’t really the end of the world to be honest, and is a simple change that their lawyers probably recommended in order to address the situation where a user cancels their account and Facebook is slow to remove the content (or the content is somehow sitting out there). (Facebook has clarified that the “license” will be exercised in accordance with the privacy settings of the user. I guess this means that if the user sets their page to “friends only” Facebook cannot display the content beyond this.)

One other term is that I think changed is the italicized portion below:

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.

Basically, users grant Facebook a license to their likeness and image for advertising purposes on or in connection with the Facebook service. If Facebook wants to use your mug on a television advertisement, this language lets them (theoretically). Really, who among us would not want to have our likeness used in a Facebook ad? (On closer look, the above language seems somewhat convoluted since a photograph submitted by a user is content which according to Facebook can only be used in accordance with the user’s “privacy settings”. The personality/publicity license seems fairly useless if the accompanying content license is much more limited.) [I’ll try to take a closer look later. Someone should post a redline comparing the two versions.]

Other procedural changes are flagged here. As Max Kennerly points out, the new terms contain a California choice of law provision (as opposed to Delaware). The new terms tweak the notice provisions and remove the class action ban (in response to widespread judicial antagonism towards these types of provisions, including in the Ninth Circuit).

* * *

Of course, many have pointed out that people are likely over-reacting. For example, Kara Swisher has a post titled “You Have No Privacy Anyway”. I also particularly liked this pictorial explanation.

Update Feb 18, 2009: In response to widespread user backlash, Facebook decided to revert to its old terms while it formulates new terms – most interestingly, as recommended in the post above, it will involve users in the process (access Mark Zuckerberg’s blog post here):

“A couple of weeks ago, we posted an update to our Terms of Use that we hoped would clarify some parts of it for our users. Over the past couple of days, we have received a lot of questions and comments about these updated terms and what they mean for people and their information. Because of the feedback we received, we have decided to return to our previous Terms of Use while we resolve the issues that people have raised.”

By Venkat Balasubramani, Tech-Internet Lawyer at Focal PLLC

Follow Venkat on Twitter here.

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Enforceable? Brian Hall  –  Feb 17, 2009 9:01 PM

It is worth noting that while click-wrap agreements themselves have been held enforceable, binding arbitration clauses, forum selection clauses, and the enforceability of provisions that allow for unilateral amendments have been questioned, and oftentimes, held unenforceable.  Not only would notice have likely reduced some of the controversy, but it may also have avoided enforcement issues.  That said, California, and the 9th Circuit for that matter, looks favorably upon click-wrap agreements (assuming the choice of law provision is enforceable).  It appears Facebook did put time and effort into the changes themselves, regardless of the questionable implementation.

Hopefully users understand that they will no longer have any claim for misappropriation of name and/or likeness against Facebook.  As noted above, and iterated by Ms. Swisher, do users even care?  I believe some might if an embarrasing picture or off-handed comment appears on a new marketing campaign.  Then again, as this whole “controversy” proves, press is press.

What Will Users Do? Brian Hall  –  Feb 17, 2009 9:15 PM

It will also be interesting to see who follows suit, or alternatively, who emphasizes that user content is indeed user content.  Maybe the speculation regarding the enforceability of the click-wrap agreement will be tested.

Facebook Retreats! Venkat Balasubramani  –  Feb 18, 2009 8:03 AM

Good points - looks like Facebook decided to pull the plug on the changes for now as noted here.  Looks like they also decided to involve users in the process which I think will benefit them in the long run.

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