Again, Facebook sparks controversy then bows to user pressure

by on February 18, 2009 · 18 comments

Facebook sparked a major user uprising when it amended its terms of service earlier this month to grant the social networking site greater licensing rights over user-submitted content. The implications of Facebook’s amended Terms of Use were originally uncovered by The Consumerist this past Sunday in a story entitled, “Facebook’s New Terms Of Service: ‘We Can Do Anything We Want With Your Content. Forever.’” The title pretty much sums up what the controversy was all about: under Facebook’s amended Terms of Use, even after a user deletes his Facebook account, Facebook would retain its license to distribute nearly all types of user-submitted content including photos and videos.

Predictably, news of Facebook’s expanded licensing rights made many users angry, with several Facebook groups against Terms of Use modifications popping up, attracting thousands of members overnight. As is often the case with juicy reports like this one, news of the Facebook fiasco spread throughout the blogosphere rapidly, eventually making its way to major tech sites and even the main page of CNN.com. By yesterday afternoon, a snapshot of Mark Zuckerberg‘s face was plastered on Fox News Channel, next to an excerpt of an entry he posted to Facebook’s blog in defense of the social networking site’s new terms.

Facebook’s explanation of its new terms seemed reasonable enough: even after a user quits Facebook, material that user has posted on friends’ walls and other messages the user has sent to others may remain available. Facebook also noted that its perpetual license only allowed the site to use material in accordance with departed users’ privacy settings (presumably at the time of their departure). Under the new terms, therefore, Facebook would still be required to respect albums marked as private–and ensure they stay that way.

But the seemingly stark contrast between Facebook’s attempts to justify the changes to its terms of use and, well, the actual language of terms themselves left many observers dissatisfied. In theory, if a user who had a Facebook photo album open to her entire network were to delete her account, Facebook would retain license to make those photos available to members of her network in perpetuity. And depending on how you parse the amended terms, Facebook could even use your profile pic in ads for the social network long after you terminated your Facebook account.

Would Facebook actually do any of these things? Probably not. As Zuckerberg pointed out, Facebook “wouldn’t share your information in a way you wouldn’t want.”  Taking this a step further, I think that even if Facebook saw a chance to earn a quick buck or two by selling departed users’ images, such a move would undoubtedly spur user backlash orders of magnitude more severe than anything the site has experienced before. Instead of thousands of users in arms, there’d be millions, and a mass exodus of users would be a very real possibility. Despite Facebook’s awesome success in the social networking arena, there are lots of robust alternatives to Facebook out there that would love nothing more than to provide a home to disaffected Facebook users. Facebook’s execs know all of this, which is why I highly doubt the site would ever commit any of the violations that some have speculated might be possible under the new terms.

Of course, none of these assurances–however comforting they may be–would hold up in court. Even though Facebook probably wouldn’t ever misuse its license to user content, it could under its new terms. That fact alone is unsettling to many users.

All these concerns were rendered largely moot this morning when Facebook announced that it had decided to revert to a previous version of its Terms of Use, thereby nullifying the changes responsible for the uprising. Facebook’s move isn’t especially surprising, nor is it unprecedented. Back in late 2007, Facebook unveiled an advertising service called Beacon that tracked the buying habits of Facebook users for advertising purposes. Beacon allowed your friends to see your purchasing habits, sparking privacy concerns and media scrutiny. After a few weeks, Facebook gave in to pressure and began allowing users to opt-out of Beacon entirely by changing their privacy settings.

The peaceful resolution of the latest Facebook fiasco further hammers home an argument that many of us TLFers have made time and time again: especially on the Web, companies have little choice but to listen to their users, and firms often find that they can’t get away with unsavory practices that might have flown under the radar in another era without spurring user backlash and, worse still, bad PR. As Bob Garfield aptly put it, when disputes between consumers and businesses arise in age of the Internet and the blogosphere, ” the Herd Will Be Heard.”

If Facebook had not relented, there’s a chance government would’ve gotten involved. Yesterday, the Electronic Privacy Information Center had announced it was “readying a complaint” against Facebook with the Federal Trade Commission. And even if that complaint hadn’t gone anywhere, chances are some member of Congress would have seen it fit to “investigate” social networking practices and send Facebook a detailed questionnaire about its content licensing policies.

But as the user uprising and Facebook’s quick reaction illustrate, markets are perfectly capable of resolving many kinds of disputes quickly and efficiently. Regulators are the dinosaurs of the digital era. Even if the FTC had acted on EPIC’s planned complaint, any regulatory ruling probably would not have emerged until long after the fiasco had been resolved–either by Facebook relenting, or by users ditching Facebook for a competing social network.

We’ll never know what would have happened had Facebook held firm, but if history is any guide, keeping regulators at bay may well have been a wise move on Facebook’s part.

  • Pingback: TPW 42: The Flare-Up over Facebook’s New Privacy Policies | The Technology Liberation Front

  • quanticle

    Well, that model works well for Facebook and Google, who are essentially competing in a perfectly competitive markets (as far as barriers to entry are concerned). However, I'm not sure that the same argument can be extended to the ISP (physical infrastructure) industry since the barriers to entry are very high there.

    To make the concept explicit, if Comcast told me tomorrow that I'd have to pay an extra $5 per month to access Facebook, who could I look to for an alternative? Qwest? Yeah right – they've been promising that DSL would be “coming soon” to my neighborhood for the last five years. Verizon? Sure, once they get around to laying fiber in my neighborhood. Basically I'd be SOL for broadband (for the near future, at least) if Comcast made some objectionable change to its TOS right now.

  • Ryan Radia

    Good point. ISPs are in a much stronger position than social networking sites to impose unsavory conditions. As more ISP choices become available to consumers in coming years, however, I expect that the market power that Comcast and Qwest enjoy today will decline. Even today, there's a lot that big ISPs can't get away with, and most U.S. residents have at least DSL and cable ISPs competing in their area. Your situation isn't the norm, statistically speaking.

  • http://www.coffeerama.com coffee

    the fact that Facebook change their TOS back so quickly is an indication that they knew they were wrong in the first place

  • http://www.coffeerama.com coffee

    the fact that Facebook change their TOS back so quickly is an indication that they knew they were wrong in the first place

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