Facebook Licensing Controversy Prompts Public to Take Closer Look at Social Networking Site Terms and Conditions

Following on the heels of a 2007 controversy over its privacy and advertising policies, Facebook has now set off a new controversy on the web with its decision to amend its terms and conditions, which deal with the licensing of content posted to its site.

The provision at the heart of this controversy states as follows:

You are solely responsible for the User Content that you Post on or through the Facebook Service. 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.

In making this change, Facebook also deleted a key phrase, according to the Consumerist, which has been credited by some bloggers with breaking the story:

You may remove your User Content from the Site at any time. If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content.

What's so controversial?  Well, the new clause gives Facebook very broad rights to utilize for commercial or advertising purposes the content that you post on Facebook.  Facebook now has the right to use your name, likeness, and image for any purpose, and to even create derivative works from that content.  Moreover, Facebook now has those rights even after you remove the content from the site.

Needless to say, this change to its terms has caused another uproar on the Internet--perhaps more of one than Facebook was expecting, given the fact that it is very common in this day and age for terms and conditions to permit modifications without notice at any time.  I'm sure Facebook anticipated that this revision to its terms and conditions would go largely unnoticed.  Of course, that is not what has happened. Instead, Facebook has created yet another public relations nightmare.

Check out some of the commentary on the blogosphere over this issue:

• Blogger Jonathan Blundell writes the following regarding the Facebook changes:

I’m not real happy with this at all. I’ve made 99% of my creative content available with a Creative Commons 3.0 license. That basically says that you’re free to use and share my content as long as you give me credit, don’t use it for commercial reasons (make money off of it) and you don’t change the licensing of it (i.e. Copyright the material).

But Facebook now claims they have ownership of everything I post on their site. That includes my recent cruise pictures, random videos of me and my friends eating sushi, pictures of my wedding and honeymoon as well as content we’ve created for the something beautiful podcast.

They claim they have the right to it all - and can do with it as they please. . . .

So, until they change their terms of service back to what they were, I won’t be posting any new content of my own to Facebook.

• Blogger Simeon Simeonov writes of the issue:

What I find particularly offensive is that, from what I understand, users have no choice over the matter. Under the current terms of service, if I were to protest and close my account then they’ll own my archived data. But if I stay and close my account some years from now, well, they might own my data. Hmm……

This is an important step in the global battle for data ownership. If Facebook gets away with this, I expect to see these types of policies quickly spread through other services. I don’t expect this to happen, however. My prediction is that this will be another Facebook Beacon-type experience and another lesson to the company about the level of sensitivity and care with which a large online player must behave

• Blogger Jim Goldstein writes of the Facebook action:

The February 2009 revision to the Facebook Terms of Use is the most egregious rights grab in the history of the Internet that I’ve seen.

The uproar has even poured over into the mainstream media:

• Fox News is following the story and has posted the prior terms of service for Facebook as well as the response thus far from Facebook and various bloggers to the controversy.
• The New York Times wrote of the controversy:

For Facebook, the ability to store users’ data and use their names and images for commercial purposes is important as it seeks to make more money from the virtual interactions of friends.

But balancing the desire for sharing with the need for control remains a challenge for Facebook as it turns five years old this month. . . . Amid the evolution, at least a few members are showing their uneasiness about the stance that Facebook is taking.

 

• CNN and CNET News  offered the following commentary:

Truth be told, most Facebook users won't give a hoot, the same way that the flurry over the Beacon advertising program in late 2007 was fueled by a few vocal privacy advocates while the general population didn't seem to care about it one way or the other but for advocates of copyright reform and privacy, not to mention photographers and writers who may want the photos they upload or "notes" they write on Facebook to eventually lead to some kind of profit, the news was alarming.

 

In looking at this controversy, the question comes to mind: is all of this outrage really warranted?

Blogger Jonathan Bailey of Plagiarism Today suggests that it may be a little overblown, stating:

The bottom line though is that Facebook is only doing what it feels it has to in order to protect its legal interest. Does it claim a wide range of rights? Yes. Does it offer a clear way to revoke them? No. If you trust Facebook, this isn’t an issue at all. If you don’t, then it’s probably time to begin thinking about an exit strategy.

Personally, I think the odds of Facebook doing anything too uncouth with a user’s content is slim to none. Facebook simply has too much to lose if users begin to get upset enough to leave.

However, this doesn’t mean that I’m going to start uploading my new novel or masterpiece paintings any time soon (not that either exist). Facebook, as with all such sites, should be reserved for works you don’t care too much about the rights in as you’re going to have to give up a lot just to get the work online through them, even under the best of circumstances. I urge caution when uploading to Facebook, but then again, I urge caution when uploading anywhere…

For my part, I have mixed feelings on the issue. Let's face it: Facebook's terms now are quite broad. If I were a lawyer representing Facebook or another social networking site, there is no question that I would prefer the new terms over the old terms. They would better protect my client from the risks of using user content elsewhere. My guess is that the language was drafted to protect against inadvertent use of user content, or perhaps against a past use of the content that was already taken within the company, outside of the prior terms and conditions. From my experience in representing clients, this is how most terms and conditions get modified--not because there are any plans in place to change the way the company does business.

On the other hand, as a businessperson, you have to take into account your customer base and its expectations, and clearly, these customers expected to maintain the rights to their own content. And there is no question that their expectations were reasonable. Why shouldn't users maintain the right to their own content and be able to limit the use of their photos and images? Furthermore, the prior terms and conditions were very similar to the terms and conditions of its arguably closest competitor, MySpace, so there was some basis for those expectations. The MySpace terms and conditions provide as follows:

MySpace does not claim any ownership rights in the text, files, images, photos, video, sounds, musical works, works of authorship, applications, or any other materials (collectively, "Content") that you post on or through the MySpace Services. After posting your Content to the MySpace Services, you continue to retain any such rights that you may have in your Content, subject to the limited license herein. By displaying or publishing ("posting") any Content on or through the MySpace Services, you hereby grant to MySpace a limited license to use, modify, delete from, add to, publicly perform, publicly display, reproduce, and distribute such Content solely on or through the MySpace Services, including without limitation distributing part or all of the MySpace Website in any media formats and through any media channels, except Content marked “private” will not be distributed outside the MySpace Website. This limited license does not grant MySpace the right to sell or otherwise distribute your Content outside of the MySpace Services. After you remove your Content from the MySpace Website we will cease distribution as soon as practicable, and at such time when distribution ceases, the license will terminate. If after we have distributed your Content outside the MySpace Website you change the Content’s privacy setting to “private,” we will cease distribution of such “private” Content outside the MySpace Website as soon as practicable after you make the change.

The license you grant to MySpace is non-exclusive (meaning you are free to license your Content to anyone else in addition to MySpace), fully-paid and royalty-free (meaning that MySpace is not required to pay you for the use on the MySpace Services of the Content that you post), sublicensable (so that MySpace is able to use its affiliates, subcontractors and other partners such as Internet content delivery networks and wireless carriers to provide the MySpace Services), and worldwide (because the Internet and the MySpace Services are global in reach).

Clearly, the MySpace terms and conditions dealing with user content are closer to the prior Facebook terms, in that the scope of the license to user content is limited in nature, and it does not permit the content to be used elsewhere for commercial purposes. As a customer, I would be far more comfortable with the MySpace language than I would be with the new Facebook language.

Having said this, Facebook's actions are not out in left field either--there are definitely other sites that are using similar language in their terms and conditions. In fact, two other popular social networking sites have adopted similar language: Linked In and YouTube. I don't know about you, but I have yet to hear any uproar over these sites' terms and conditions.

All in all, this controversy provides a good lesson to the public on Internet terms and conditions: they can be changed at any time for any reason. Indeed, that is the language in the fine print of most websites' terms and conditions. Given this fact, you have to anticipate that your terms of use could be changed at any time to modify your rights as a user of the site, and plan accordingly.

On the other hand, this controversy provides a good reminder to businesses advertising on the web: anticipate how your customer base is going to respond to the modifications when you consider changing your terms and conditions. Just because you have the legal right to modify your terms and conditions, does not mean that you should do so. There are times when the consequences of making the change can be worse than the risks posed by leaving the terms and conditions "as is."