Last week we discussed private versus public regulation of the internet. We saw a presentation on the topic and were introduced to the politics of ICANN. As interesting as all of that information was, I was most interested in a topic Professor Sorkin brought up. Professor Sorkin mentioned Terms of Service agreements and Facebook. Since this is the topic of my thesis paper, I think it greatly relates to the subject of private and public regulation of the internet.
I have a strong interest in Social Media, in particular Web 2.0 technologies and the laws that govern online social networking sites. I think it’s very interesting how individuals shares their very private information so freely with websites in an attempt to attract “friends” or “followers” on social media sites. I have written several articles relating to this on the blawg I write for: Social Media Law Student.
I have chose to write my thesis paper on Terms of Services Agreements and the lack of the contractual “meeting of the minds”. Interestingly, Professor Sorkin mentioned in class that Facebook recently attempted to change its TOS Agreement and received a great deal of heat from its users. In response, Facebook created an open forum for discussion of what information Facebook should be allowed to share with advertisers and what information could not be shared. You can read more about the discussion here.
Professor Sorkin questioned what really would have happened if Facebook had refused to listen to its user’s concerns about the new TOS Agreements. One of the students in our class mentioned that probably 5% of the people would make a fuss or possibly quit Facebook, but the impact of ignoring those concerns would be minimal. I disagree for a few reasons.
It’s clear that Facebook has chosen to privately regulate itself on the internet. I wrote an article on its behavioral advertising practices in which I described the recent House of Representatives Committee for Energy and Commerce’s investigation into behavioral advertising. In that investigation, Facebook claimed that it prided itself in privately regulating its practices and provided an open forum for its users to discuss any concerns they may have with the distribution of their private content. Also, Chief Privacy Officer of Facebook Christopher M. Kelly stated that Facebook may sell information submitted by users, but that content would never be connected with the user’s actual identity. Facebook stood behind the policy that it could privately regulate itself because it was transparent and revealed all its methods of collecting and sharing its user’s content with advertisers.
Interestingly, very few Facebook users found the original change to the Terms of Service agreement transparent enough and protested. In my Trademark and Copyright class we learned how the marketing world and the legal world can often conflict. However, in this case the marketing and legal world converged. Facebook is a brand and receives its sole source of income from advertisers. Facebook has advertisers because Facebook has 300 million users. The minute Facebook starts ignoring its users, it will become discarded and yesterday’s social networking site (think MySpace). In an effort to maintain its brand image and maintain customer loyalty, Facebook took the initiative to discard its old Terms of Service agreement for a plain langauge TOS Agreement that everyday people could understand. As a result of this effort, Facebook demonstrated it was a trustworthy brand that was listening and addressing its customer’s concerns while simplifying the overcomplicated aspects of the law.
Facebook was able to privately regulate itself so as to appease its fans while maintaining its business model.
Interestingly, there are several groups advocating for greater transparency in relation to behavioral advertising. Those groups have stated that there needs to be public and governmental regulation of Web 2.0 technologies and Social Networking sites. One of the strongest evidence supporting these claims came from Scott Cleland, the President of Precursor, LLC. Cleland identified that Consumer Reports from September 2008 demonstrated that:
- 61% of consumers are confident that what they do online is private and not shared without their permission
- 57% incorrectly believe that companies must identify themselves and indicate why they are collecting data and whether they intend to share it with other organizations
- 48% incorrectly believe their consent is required for companies to use the personal information they collect from online activities.
Finally, the Center for Digital Democracy along with a whole host of other groups have posted a primer containing 20 recommendations, ideas and possible solutions for the gap between consumer protection and consumer privacy online.
In the primer the privacy groups identified several legislative recommendations including:
- Preventing collection of data on minors
- Sensitive information should be defined and protected including health data, finances, ethnicity, races, sexual orientation, and political activity
- Behavioral targeting for individual redlining activities should be illegal
- The government should create and enforce a baseline to guarantee consumer privacy
Both these advocate groups express concern over the power of private regulation and if its sufficient for regulating Web 2.0 technologies and Social Media sites. I found their arguments particularly compelling and worth mentioning.
Even though Facebook can successfully regulate itself in this situation, it doesn’t mean Facebook will always be able to self regulate. There is still a definite gap between several popular Web 2.0 and Social Media technologies and transparency. Maybe the only way to have true enforcement of the law is for public and governmental regulation.
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