Tuesday, December 27, 2011

First Facebook, Now Twitter: Social Media Under Legal Siege

A lawsuit between Noah Kravitz, a writer who used to write for mobile phone site, Phonedog.com, and the company has raised the uncomfortable issue of who owns a Twitter account. It is a nuanced case, explained in detail in the New York Times.
Suffice to say that depending on how the issue is decided, it could upend the business practices that have formed around this channel—from promoting to branding to customer service.
For anyone in shock that their Twitter contacts might not belong to them, well, they can consider this their last warning. They very well could not be.
In fact, the question about who owns Twitter contacts has already been raised in the LinkedIn channel.
In a guest post for Forbes.com, book author and Distributed Marketing blogger Deb McAlister explored the subject. (Quick answer: it depends, but don’t count on it being you).
Movie Rights and Reddit Forums
Indeed, the question of ownership is popping up in all kinds of online forums. Writing for Hollywood Reporter, Eriq Gardner recently looked at whether Warner Bros. really has exclusive movie rights to a story posted on Reddit? (Quick summary: James Erwin, a largely unknown author, pulled out of Reddit after selling a movie plot to Warner Bros. that he posted via a series of stories on the site. His reason for abandoning Reddit is that he has concerns about the user agreement and whether it means Reddit might own the rights to his work.)
Such an expansive interpretation of intellectual property rights, or not, on social networks could impact more than just the narrow question of who owns which contacts. Any site that attracts user generated content, from Google to Apple to Amazon, to well, just about every online site that has an open comments section.
Even Facebook–or at least a good portion of its advertising revenues–is at risk.
Bye Bye Sponsored Stories, At Least Those Involving Minors
A suit has been filed against Facebook in California alleging it violates a state law on commercial endorsements—namely, it bans using someone’s name for economic benefit without their permission.  Federal district judge Lucy Koh has ruled the suit can move forward. (The Fraley v. Facebook class action complaint was initially filed in the California Superior Court for the County of Santa Clara.  Facebook removed the case to federal court on the basis that it raised exclusively federal issues under in Class Action Fairness Act.)
Based on how the California statutes reads, attorneys tell me this case has a good chance of succeeding, which would be a problem for Facebook—not to mention those brands that have invested millions in their Facebook channels for precisely such socially-oriented advertising opportunities.
Because so much is at stake—Facebook’s advertising revenues are expected to rise to $6.9 billion in 2012, from an estimated $4.27 billion, 90% of which are due to advertising, according to eMarketer—Facebook will likely settle the case, says Jorge Espinosa, partner with the Miami-based Intellectual Property law firm Espinosa | Trueba.
Still, there will be unexpected implications for marketers because any settlement is bound to result in internal policy changes, he says.
Facebook has made considerable privacy control concessions with the FTC and more recently, Ireland’s Office of the Data Protection Commissioner.
Definition of a Minor, Which Facebook Doesn’t Acknowledge
The next front, Espinosa believes, will be minors, and policies regarding their use of Facebook will be prominent in any settlement, he predicts.
“Many states have rights of publicity laws, which prevent the use of the name or likeness of a person without their permission.  With a minor, however, he or she lacks the capacity to grant such permission without parental approval.”
Consumer Reports published a study in May suggesting that 38% of minors on Facebook are under the age of 13 in direct violation of Facebook’s alleged policy, he noted.
Another problem with the Facebook policy is that it extends only to minors below the age of 13, which of course, is below the definition of minor in most states.  “Minors under 18 but over 13 can create accounts but their information is not listed on search sites.  This policy does not address at all the internal marketing within Facebook using the child’s name and image.”

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