About those Ashley Madison Terms and Conditions

Very few start-ups dream of establishing a site like Ashley Madison: the Avid Media’s venture is unappealing in service and (now more than ever) reputation.

Among the many practices to be avoided at Ashley Madison would be an emulation of that website’s terms and conditions: those terms attempt to waive liability on the company’s part for fraudulent conduct.

Over at the Guardian, Alex Hern parses the t&cs, and here’s just part of what he finds:

However, in the terms and services of the site, it explicitly warns would-be cheaters that many users of the site subscribe “for purely entertainment purposes”. It continues:

You acknowledge and agree that any profiles of users and Members, as well as, communications from such persons may not be true, accurate or authentic and may be exaggerated or based on fantasy. You acknowledge and understand that you may be communicating with such persons and that we are not responsible for such communications.

SeeAshley Madison’s terms and conditions told users it ran fake accounts @ The Guardian.

As it turns out, the terms were drafted this way because Ashley Madison’s client base of women was, well, not so very big.  See, How Ashley Madison Hid Its Fembot Con From Users and Investigators @ Gizmodo.

In this respect, the t&cs weren’t overbroad: they were properly tailored to the improper business practices of the company.

(Quick note: I’ve written previously that Ms. Newitz’s concern about Reddit’s terms of service seemed unjustified to me, and that Reddit’s terms were properly broad.  In the Ashley Madison case, by contrast, I think Ms. Newitz’s discoveries are compelling.  It’s a solid discovery for which she deserves considerable credit.)

Ashley Madison is facing civil suits in more than one country, but that’s only a part of the site’s problem. Deceptive practices open the company to both civil administrative and criminal actions.

There’s an easy fix for problems like this: avoid fraudulent practices, and (2) don’t believe for a moment that terms and conditions that waive claims against fraud will insulate a company from liability.




“4 Common Legal Mistakes Small Businesses Make”

I first saw Stephanie Christensen’s brief list of mistakes that small businesses make in late 2013, but it’s evergreen.

Numbers One and Two (‘Misunderstanding ownership of creative assets’ & ‘Misunderstanding copyright laws’) are related: they often concern smart, well-educated non-lawyers who mistakenly think the law protects more or less than it actually does.

Very few business people are wholly mistaken or wholly unaware of laws affecting their businesses.  It’s in understanding the scope of applicable law that even skillful non-lawyers go wrong.

Sometimes they don’t go wrong by much, so to speak.  Still, as with building a bridge, even a few inches of misalignment brings considerable risk.

See, 4 Common Legal Mistakes Small Businesses Make @ QuickBooks.

The Big Picture on IP

David Post, writing at the Volokh Conspiracy, recommends a recent paper from Mark Lemley (“IP in a World Without Scarcity“) that summarizes the state of intellectual property law.

It’s a sound recommendation, and well worth following to Prof. Lemley’s paper.

Here’s Post’s assessment:

If I were still teaching a class on IP law, or Law and the Internet, I think I’d start with Lemley’s paper, in its entirety. Much — maybe even most or all – of what he talks about has been said before; but like all really effective summary pieces, it imposes order on some otherwise very chaotic disconnected threads, so that the Big Picture comes very, very clearly into focus. Most highly recommended.

See, from David Post, What everyone needs to know about intellectual property law @ Volokh Conspiracy.

Mark Lemley’s paper is available at the SSRN, to read online or download.

Answering an Objection to the Language of Reddit’s Expanded Ban

In last week’s post, defending Reddit’s decision to expand its content ban, I promised that I’d answer an objection to that expanded content-restriction policy

The objection to that content policy comes from Gizmodo, in a post from Annalee Newitz entitled, Reddit Bans /r/Coontown For All the Wrong Reasons

Ms. Newitz, sensibly, isn’t opposed to a ban, for subreddits like /r/Rapingwomen or /r/Coontown; she feels that the content-restriction policy that CEO Steve Huffman promulgated amounts to a “terrible set of policies.” 

She contends that the new August restrictions were unnecessary, and that prior content restrictions would have allowed Reddit to ban like /r/Coontown because

Huffman could have banned /r/Coontown under the original set of rules, which state that Reddit can ban forums “that incite harm against others.” But because he wasn’t willing to admit that racism incites violence, he wound up inventing a crappy new rule — based on whether subreddits are “annoying” or “make Reddit worse” — that will actually do more harm than good.

Reddit made the right decision to ban /r/Coontown, but to base a policy against racist speech on the theory that it leads to violence is unnecessary, and puts a website in the business of contending for or against arguments of social science. 

A broader definition of what’s unacceptable, without a tie to inciting violence, assures that a private publisher’s freedom of act – in defense of its brand name, customer goodwill, etc. – will not require a link between speech and possible reader conduct.  Advising a private publisher-client to establish a content-restriction that requires a link between speech and violence would only limit a private publisher’s ability to act.  Publishers are not social scientists, nor need they be. 

There are, candidly, some derogatory terms that a private publisher – in this case, crucially, a private entity like Reddit –  might mish to limit that do not have a link to violence. 

That’s why Reddit’s latest content-restrictions, ones that allow a ban apart without a link to violence, are ones that I would have advised: they offer freedom of action to the publisher. 

It’s true, of course, that CEO Huffman might ban too much, but the need to maintain readership will act as a brake on his restrictions. 

In any event, none of this involves state action.  If private publishers limit too much, there are sure to be others that will spring up as alternative havens.  (That’s one reason state action is so different: one wouldn’t expect new governments to spring up in response to state censorship.)

A publisher-client’s best interests are served through flexible policies that afford discretion in implementation. 

That’s precisely what Reddit’s new content restrictions allow.

Reddit Wisely Expands Ban on Offensive Content

On July 16th, Reddit announced a ban on some offensive content, and a policy of concealing other content to prevent easy access of display to readers. This two-tiered approach to offensive content was novel, and a response to conflicting demands for an open forum and for a site free of racist posts, for example.

A few kinds of content, including child pornography or other patently illegal activities, were banned:

Anything illegal (i.e. things that are actually illegal, such as copyrighted material. Discussing illegal activities, such as drug use, is not illegal)
Publication of someone’s private and confidential information
Anything that incites harm or violence against an individual or group of people (it’s ok to say “I don’t like this group of people.” It’s not ok to say, “I’m going to kill this group of people.”)
Anything that harasses, bullies, or abuses an individual or group of people (these behaviors intimidate others into silence)[2]
Sexually suggestive content featuring minors

A second category wasn’t banned, but instead restricted:

Adult content must be flagged as NSFW (Not Safe For Work). Users must opt into seeing NSFW communities. This includes pornography, which is difficult to define, but you know it when you see it.
Similar to NSFW, another type of content that is difficult to define, but you know it when you see it, is the content that violates a common sense of decency. This classification will require a login, must be opted into, will not appear in search results or public listings, and will generate no revenue for Reddit.

A subreddit that was to be concealed was the astonishingly crude, inveterately racist subreddit /r/Coontown, to offer a sense of how offensive some of this content was.

How long would Reddit be able to keep some of these subreddits (even if concealed) in the name of free expression (although, of course, not on inapplicable First Amendment grounds)?

Not long: CEO Steve Huffman expanded the ban on August 5th. It’s impossible to see how Huffman could have done otherwise than ban /r/Coontown and subreddits of similar ilk, and expect Reddit to be a welcome destination for readers or corporations.

However well-intentioned Reddit’s July 16th desire to balance speech and decency, Reddit was never going to be able to balance the two without looking like (a less candid version of) Stormfront. Reddit a large concern needing and expecting a wide readership; concealing vile content was never going to satisfy expectations against racist trolls, etc.

I cannot think of a circumstance under which I would have advised Reddit to keep but conceal subreddits like /r/Coontown. A client is owed more than a mere assessment of what may be done; they’re owed a practical assessment as well as a black-letter one.

Steve Huffman made the right decision to discard these subreddits entirely.

Next: Answering an Objection to the Language of Reddit’s Expanded Ban.

(Some) Startups Can Lawfully Tweet to Test Investor Interest

Startups are now able to post a Twitter message about their stock or debt offering to gauge interest among potential investors, the U.S. Securities and Exchange Commission said this week. The announcement continues the SEC’s trend of warming up to social media, which began two years ago when it approved the use of posts on Facebook and Twitter to communicate corporate announcements such as earnings….

The SEC’s latest endorsement of social media only applies to companies looking to raise as much as $50 million a year. New small-business fundraising rules were approved in March, which increased the limit for capital raised to $50 million from $5 million to enjoy the perk of fewer required disclosures.

The changes were required under the 2012 Jumpstart Our Business Startups Act, which deregulated fundraising rules for small businesses. Firms that use Twitter to solicit investor interest must include a link to a required disclaimer that says the firm isn’t yet selling securities, the SEC said in this week’s announcement.

Via SEC Approves Tweeting by Startups to Test Investor Interest @ Bloomberg Business.

See, alsoJumpstart Our Business Startups (JOBS) Act @ SEC.gov

Others have tried, and now Facebook enters the workplace (formally) with Facebook@Work

At TechCrunch, Ingrid Lundgren reports on Facebook’s platform for businesses to create their own social networks.  She offers lots of useful detail, and correctly notes that some competing offerings in this space have failed (or just haven’t taken off):

About six months ago, we reported that Facebook was working on a new product aimed squarely at the enterprise market under the working title, “FB@Work.” Now that product is officially coming to light: today the company is launching new iOS and Android apps called “Facebook At Work,” along with a version of Facebook at Work accessible via its main website, which will let businesses create their own social networks amongst their employees that are built to look and act like Facebook itself.

(Facebook At Work is now available for download on iOS, and we’ll update with a links to the Andrid version once it’s live, though both are usable via a limited pilot to start with. Check out Josh’s follow-up story for more screenshots, details on privacy, and analysis.)

Employers can create separate log-ins for employees to use with their Work accounts, or users can link these up with their other profiles to access everything in one place.

The product puts Facebook head-to-head with the likes of Microsoft’s Yammer, Slack, Convo, Socialcast, and a huge number of others who are trying to tackle the “enterprise social network” space. Even LinkedIn conveniently let drop last night that it too was looking atbuilding a product for coworkers to communicate and share content (but not chat, as a LinkedIn spokesperson tells me). Not all of these have been a hit: Lars Rasmussen, the engineering director at Facebook who is heading up the project, had in his past once headed up one of the failed efforts at an enterprise social network, Google Wave….

“Facebook at Work’s strength is that we’ve spent ten years and incorporated feedback from 1 billion active users,” he says. “All of that is embedded now in the same product but adapted for different use cases.”

And it’s actually used by staff. “When Mark [Zuckerberg, the CEO] makes an announcement he just posts it on Facebook at Work,” Rasmussen says.

The whole post, Facebook Unveils Facebook At Work, Lets Businesses Create Their Own Social Networks @ TechCrunch, brims with detail.