NLRB Judge Rejects Company Mandated Disclaimer on Employee Social Media Sites

An NLRB administrative law judge recently found various provisions of The Kroger Co. of Michigan’s online communications policy to be impermissible. One such provision includes a company mandated disclaimer to be used by employees when they identify themselves as being associated with the company or publishing anything about the company.  The decision reflects the importance of carefully crafting corporate social media policies with one eye on protecting the organization and the other on compliance with the National Labor Relations Act.

The offending disclaimer provision reads, “If you identify yourself as an associate of the Company and publish any work-related information online, you must use this disclaimer: “The postings on this site are my own and do not necessarily represent the postings, strategies or opinions of the Kroger Co. family of stores.”

Administrative Law Judge David I. Goldman writes, “The ultimate issue, then, is whether requiring a disclaimer for every posting by an individual identified as a Kroger employee that conveys “work-related” information unduly burdens legitimate Section 7 communication to an extent that would be likely to chill employees’ willingness to engage in it.”  Section 7 of the Act provides:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities.

The issue as framed by the ALJ was answered in the affirmative.  “Kroger’s rule is manifestly broader than its legitimate interest.  It seeks to protect Kroger’s interest by requiring the imposition of a disclaimer on every identifiabl[y]-employee communication conveying work-related information.”  Earlier in the decision ALJ Goldman notes, “It would include an online comment made in response to a news article, on Facebook, blogs –examples are endless.”

This recent decision continues to make the balance between managing one’s corporate reputation and adhering to federal law particularly challenging within the context of online communications.

You can read the full decision here.  

Court Rejects Lawsuit against Facebook Claiming Misuse of Minors’ Photos

A U.S. District Court Judge has dismissed a proposed class action lawsuit against Facebook. The suit claimed that the social media company is impermissibly using the names and likenesses of minors in its advertising.

Judge Richard Seeborg, of the U.S. District Court for the Northern District of California, rejected the plaintiff’s assertion that, even if permission for such use was acquired via the plaintiffs’ acceptance of Facebook’s Statement of Rights and Responsibilities (“SRRs”,) since the plaintiff class is made up solely of minors the SRRs are unenforceable against them under California law.  Judge Seeborg writes, “Plaintiffs’ arguments largely flow from an opposite and incorrect presumption, that minors generally do not have the power to contract.”  Under California’s Family Code §6710, “Except as otherwise provided by statute, a contract of a minor may be disaffirmed by the minor before majority or within a reasonable time afterwards or, in case of the minor’s death within that period, by the minor’s heirs or personal representative.”  “Although this section almost certainly would allow [p]laintiffs to disaffirm the SRRs, they have never plainly expressed an intent to do so, and they do not dispute that they continued to use their Facebook accounts long after this action was filed.  While Plaintiffs argue that a minor may disaffirm a contract without restoring any of the benefits he or she has received, they have offered no explanation as to how the principle would somehow retroactively vitiate the consent they had given through the SRRs at the time their names and profile pictures were used,” writes Judge Seeborg. 

According to Facebook it only republishes information users have already voluntarily shared with certain Facebook friends with those very same friends and “sometimes alongside a related advertisement.”

The order dismissing the complaint is available here.

James Dean Rumbles With Twitter Over Alleged Trademark Infringement

A complaint, originally filed in an Indiana state court, was moved to federal court last week alleging that Twitter’s failure to terminate the @JamesDean handle and site violates various laws including, among other laws, right of publicity, trademark infringement and false endorsement under the Lanham Act.

Indiana, which is home to one of the most expansive right of publicity laws, is also home to CMG Worldwide, which manages the commercial estates and licensing rights of many deceased celebrities, including James Dean.  The complaint was brought by James Dean, Inc. against both Twitter and certain John Doe defendants who are the currently unidentified owners of the James Dean Twitter site.  According to the complaint, “On numerous occasions since October 11, 2012, CMG, by and on behalf of its client, JDI, has contacted TI [Twitter, Inc.] in an attempt to have the Unauthorized Use’…’ceased.” 

The complaint notes that JDI holds federally registered trademarks to the James Dean name and that both Twitter’s and Does’ conduct “is likely to cause confusion, to cause mistake, or to deceive as to source, sponsorship, connection, association or affiliation between CMG, JDI, and TI and Does.”  The JDI complaint also asserts both Indiana state statutory and common law right of publicity violations.  Among other remedies, the complaint seeks an injunction requiring Twitter to turn over the names of the site’s owners, which Twitter has so far refused to do.  Interestingly, in correspondence attached to the complaint, CMG in early correspondence with Twitter asserts that the @JamesDean site is in violation of Twitter’s own trademark policy and guidelines for “Fan Accounts,” writing “First, you state that ‘the username should not be the trademarked name of the subject of the news feed, commentary, or fan account. Here, the subject of the Twitter feed is James Dean, and the username @JamesDean consists solely of the trademarked name.  Second, you state that ‘[t]he profile name should not be the trademarked name of the company or include the trademarked name in a misleading manner.  The profile name for the account in question is listed as ‘James Dean.”  “Your third guideline states, “The bio should include a statement to distinguish it from the real company, such as ‘Unofficial Account,’ ‘Fan Account’ or ‘Not affiliated with…”.  The @JamesDean account’s bio contains none of these distinguishing statements.” 

A piece in the Hollywood Reporter notes, “Over the years there have been many disputes over Twitter handles, but not quite like this one.  The social media site has an “impersonation policy” that forbids accounts portraying another person in a confusing or deceptive manner as well as a trademark policy,” but apparently the service has drawn a line in the sand when it comes to dead celebrities.”

Tweet in NY Times Ad Ruffles Feathers

The BBC reports that a full page advertisement appearing in The New York Times, which included an actual tweet, raises copyright concerns regarding the reprinting of tweets for such purposes.

The ad was a promotion for the film, Inside Llewyn Davis and the tweet belonged to the New York Times’ very own film critic, A.O. Scott.  Scott, apparently a fan of the Inside Llewyn Davis soundtrack, tweeted, “You all keep fighting about Wolf of Wall St. and Am Hustle. I’m gonna listen to the Llewyn Davis album again.  Fare thee well, my honeys.”  Scott said the firm behind the full-page ad had originally sought his permission to use a portion of the tweet, which he denied stating that it was “a slippery slope and contrary to the ad hoc and informal nature of the medium.”  Regardless, the edited version of the tweet appeared in the ad.

Of interest here is the convergence of copyright, advertising and contract law.  Namely, Scott’s ownership of his tweet, the use of his tweet as an endorsement for a product and Twitter’s apparent prohibition against using tweets in ads without the user’s permission.  With respect to Twitter’s own rules, it states that one must get the user’s permission before, among other things, “creating an advertisement that implies the sponsorship or endorsement on behalf of the user.”

While it does not appear as though Scott will be taking any action other than registering his annoyance with the film promoter’s actions, the incident does serve as a reminder that, when using content found on social media, one must be careful to consider both the intellectual property rights of the creator as well as the terms and conditions of the social media site itself.

You can read A.O. Scott's piece on the episode here.

LinkedIn Brings John Doe Claim Against Scrapers

LinkedIn has filed a lawsuit in the U.S. District Court for the Northern District of California claiming that bots have been used to impermissibly scrape data from the profiles of hundreds of thousands of users. Thousands of fake accounts were created with the objective of using the bots to collect information from the profiles of legitimate accounts. While LinkedIn claims to have traced the accounts to an Amazon Web Services account, the identity of the actual culprits is still undetermined leading the social media site to identify the defendants as “The Doe Defendants.”

“Bots” refers to automated software applications that execute tasks over the Internet.  “Scraping” refers to the extraction of information from websites and is often restricted by a site’s terms of use, including LinkedIn’s.

Three important issues tied to the scraping include (i) the mere fact that the information was collected by parties who have not signed on to LinkedIn’s terms and conditions, (ii) determining how the scraped information will ultimately be used; and (iii) the impact on the integrity of LinkedIn’s profiles if many are found to be fake.  Moreover, in an InformationWeek article, LinkedIn’s concern with the degrading of its LinkedIn Recruiter services is noted.

LinkedIn is currently seeking the names of the owners of the fake accounts from Amazon. 

Important Social Media Guidance Issued for Financial Institutions

The Federal Financial Institutions Examination Council (FFIEC) issued final supervisory guidance that financial institutions are expected to use in "their efforts to ensure that their policies and procedures provide oversight and controls commensurate with the risks posed by their involvement with social media."

The FFIEC is the formal inter-agency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by, among others, the Federal Reserve System, the Federal Deposit Insurance Company (FDIC) and the Consumer Financial Protection Bureau (CFPB).  The memorandum issued by the Council, "Social Media: Consumer Compliance Risk Management Guidance,"  is meant to "address the applicability of federal consumer protection and compliance laws, regulations, and policies to activities conducted via  social media by banks, savings associations, and credit unions, as well as nonbank entities supervised" by the CFPB.  Compliance officers with financial institutions as well as other senior managers at such institutions would be well served to review the Council's Guidance not only pursuant to their own responsibilities and obligations as outlined in the memorandum, but also because the memorandum provides a brief, yet substantive, overview of a wide variety of laws applicable to the financial sector's use of social media.  The Guidance makes reference to, and provides relevant summaries of, a variety of laws including, but not limited to, the Truth in Savings Act, the Equal Credit Opportunity Act, the Truth in Lending Act and the Fair Debt Collection Practice Act.

The Guidance  states that a "financial institution should have a risk management program that allows it to measure, monitor, and control the risks related to social media."  It also specifies that the risk management program should provide guidance and training for employee official use of social media.  The components of the risk management program include, in brief, the following:

• a governance structure with clear roles and responsibilities;
• policies and procedures regarding the use and monitoring of social media and compliance with all applicable  consumer protection laws and regulations, and incorporation of guidance as appropriate;
• a risk management process for selecting and managing third-party relationships in connection with social media;
• an employee training program;
• an oversight process for monitoring information posted to the financial institution's social media site;
• audit and compliance functions to ensure ongoing compliance; and
• parameters for providing appropriate reporting to the financial institution's directors and senior management  for periodic evaluation.

The Guidance points out that "Since this form of customer interaction tends to be both informal and dynamic, and may occur in a less secure environment, it can present some unique challenges to financial institutions."

Court Says Social Media Sites Off Limits to Sex Offenders

A New Jersey appellate court has upheld the state parole board’s restriction disallowing convicted sex offenders from accessing social media or other comparable web sites.

Superior Court Judge,  Jack Sabatino, writing for the three judge panel, said, “we are satisfied that the Internet restrictions adopted here by the Parole Board have been constitutionally tailored to attempt to strike a fair balance.”  Judge Sabatino continued, “We recognize that websites such as Facebook and LinkedIn have developed a variety of uses apart from interactive communications with third parties.  Even so, the Parole Board has reasonably attempted to draw the line of permitted access in a fair manner that balances the important public safety interests at stake with the offenders’ interests in free expression and association.”

The defendants, several convicted sexual offenders whose cases were consolidated, challenged the constitutionality of the restrictions as infringing their First Amendment rights of free speech and association, a violation of their Due Process rights and  corresponding rights under New Jersey’s Constitution.  The restrictions stem from Megan’s Law, which is a series of laws, originally passed in New Jersey, aimed at sex offenders.  One component of Megan’s law includes a requirement that those persons convicted between 1994 and 2004 of certain sexual offenses must serve, in addition to any existing sentence, a special sentence of  “community supervision for life,” and those convicted after that date range are sentenced to “parole supervision for life.”

The New Jersey Parole Board’s restriction does provide for parolees to seek special permission for gaining access to certain sites for work or another “reasonable purpose.”  The state’s Deputy Attorney General said, “It is not the Parole Board’s intention that these provisions bar appellants from having Internet access to news, entertainment, and commercial transactions.”

The New Jersey restriction is hardly novel as these cases have been sprouting up throughout the nation with varied outcomes.  You can read the full opinion here.  

Law Enforcement and the Social Media Stakeout

Law enforcement techniques that were previously used by only federal agencies are becoming more readily accessible to law enforcement at the local level.

Police sitting in a car, with a cup of coffee in hand, waiting for something to "go down" at the building across the street is a scene we have all watched countless times in movies over the years.  While possibly not as dramatic for cinematic purposes, today police are able participate in big data stakeouts from their own desks.  At a meeting last month for the International Chiefs of Police (IACP), a cloud based service was unveiled that will allow local law enforcement to monitor social networks for evidence and clues of crimes committed in the brick and mortar world.

A piece in ArsTechnica noted that a poll of 1,200 law enforcement officers, as conducted by LexisNexis, found that four out of five officers are now using social media as part of their investigations.  New SaaS programs allow police to aggregate information culled from social media sources and then link to databases with public records to enable law enforcement to cross reference the information gathered.  The article also noted that one of the services providing this type of assistance will even "monitor the general mood of postings and pick up potential threats of violence."

While police have been using social media for some time as an aid to investigations, new technology and services are providing them with more elaborate tools to assist them with their online efforts.

Creating Fake Profile of Your Competitor on LinkedIn…Bad Idea

If you think making bad choices on social media is limited to high school students and politicians, you should take a look at AvePoint, Inc. and AvePoint Public Sector, Inc. v. Power Tools, Inc. d/b/a Axceler and Michael X. Burns.

In this Virginia, District Court case, the court refused to dismiss most counts in the complaint brought by AvePoint, Inc. against its software competitor, Axceler.  The complaint alleges that Axceler and its agents made false, defamatory, and deceptive claims and statements regarding Avepoint through both Twitter and LinkedIn, as well as through direct communications with customers and prospective customers.  Specifically, the allegations against Axceler state that the company attempted to confuse customers into falsely believing that (i) AvePoint is a Chinese company, not an American company, (ii)  AvePoint’s software is not made, developed or supported in the U.S., (iii) AvePoint’s software is maintained in India, (iv) that Axceler’s ControlPoint software is “Microsoft recommended” over AvePoint’s DocAve software, (v) AvePoint’s customers are “dumping out of 3 year deals in year 2 to buy Axceler’s ControlPoint, and (vi) Axceler uses its maintenance revenue to improve its customers’ existing products, whereas AvePoint uses its maintenance revenue to develop new products to which its customers have no access.

If all of the allegations are true, it appears the defendant went to remarkable lengths to execute its campaign against the plaintiff.  The complaint alleges that the defendant created an account on LinkedIn for a fictitious AvePoint representative named Jim Chung and, in connection with the account, used the plaintiff’s registered trademark.  Emphasizing the confusion caused by the defendant’s actions, the plaintiff noted Jim Chung’s LinkedIn connection list.  Further, taking full advantage of the opportunities afforded by social media, the defendant’s Regional Vice President of Sales for Western North America, while at the SharePoint conference in Las Vegas, tweeted in regard to the fictitious AvePoint representative, “Just ran into jim chung from avePoint Good guy.” To add further credibility to Jim Chung’s existence, another Axceler employee tweeted, “@MICHAELBURNS Free Jimmy! #Axceler.”

The District Court refused Axceler’s request to dismiss most of the nine counts set out in AvePoint’s complaint.  The counts the court refused to dismiss included defamation, breach of contract (defendant also allegedly acquired trial software from the plaintiff through deceptive means), trademark infringement, false association or false endorsement under the Lanham Act, False Advertisement under the Lanham Act and certain violations of Virginia law.

The court’s full opinion is available here. 

Facebook Considers Using Cursor Tracking Technology

The Wall Street Journal reports that Facebook is currently looking into technology that will enable the social network to track the location of a user’s cursor on their screen or interface.

The Journal noted that Facebook would not be the first company to engage in this type of behavioral tracking as Shutterstock, a digital image marketplace, has already done so.  The article quotes Shutterstock CEO, Jon Oringer, as saying, “Today, we are looking at every move a user makes, in order to optimize the Shutterstock experience.”

The potential Facebook tracking technology could collect data on how long a user’s cursor hovers over a part of the website and whether user’s newsfeed is visible at a specific time on the user’s mobile phone.  Facebook is still in the process of testing the technology, but the Journal reports that the company should know whether it will be proceeding with the technology within months.

Ken Rudin, Facebook’s head of analytics, is working on increasing the volume of the company’s available data and storing it in a way that can be accessed more efficiently. He referred to the review of the new technology as a “never-ending phase” noting that it will not necessarily be rolled out.

With the knowledge that Facebook is now considering this technology and, if it uses it, will not be the first company to do so, another layer of behavioral tracking can be added to the myriad ways data can be collected and used on social media platforms.

Potential Landlord Liability in Facebook Stalking Case

A recent ruling by an Ohio appellate court indicates that the landlord of an apartment complex could have liability in a negligence action brought in connection with a Facebook stalking incident.

The facts of this case, as outlined by the Court of Appeals Twelfth Appellate District’s opinion, are particularly disturbing.  The case involves a single mother, Lindsay P., who resided with her young daughter in an Ohio apartment complex.  The mother complained to the management company, Towne Properties Asset Management Co., Ltd., about excessive noise, including fighting and loud music, which emanated from the apartment below.  The apartment below was occupied by both the resident named on the lease as well as her live in boyfriend who was not a party to the lease and whose presence was not contemplated by the lease terms.  The dispute eventually led to the downstairs neighbors’ boyfriend banging on Lindsay P.’s door and engaging in other intimidating behavior.  The intimidating behavior included the neighbor’s boyfriend eventually contacting Lindsay P. through her Facebook account.  He “began the exchange by stating that he knew the two had differences, that he had seen Lindsay upset and crying, and that he knew things were not ‘easy for a single mom.”  He proceeded to make apparently sexual overtures to Lindsay P. and even attached a link to a pornographic website showing a man and woman having sexual relations and who the court said “looked similar” to both Lindsay P. and her neighbor’s boyfriend.  After the matter continued to escalate in this manner and Lindsay P.’s concern and fear continued to grow, she allegedly informed the management company that she would like to leave her current residence and look for another place to live.  The management company told her that “was not an option,” but that instead she could move to a different apartment managed by the company a few blocks away.  While not an ideal alternative, as termination of the lease appeared to be rejected by the management company, Lindsay P. agreed to the move even though it was in a first floor apartment that she expressed concern over “because of safety and accessibility reasons.”  Soon after moving into the new apartment, the neighbor’s boyfriend broke into Lindsay P.’s apartment and proceeded to rape her with her young daughter in a nearby room overhearing the attack.

The record of the case indicates that the management company had been provided with a copy of the contents of the parties Facebook exchange and informed Lindsay P. to contact the local police, which she did.  “It is undisputed that the police did not pursue charges against Haynes (the neighbor’s boyfriend) because of the Facebook exchange, nor did they investigate the matter.” There was some dispute as to whether Lindsay P. had expressly requested that her lease be broken and the court reasoned that such lack of clarity was an issue of credibility that “must be determined by the trier of fact.”  Moreover, while the landlord’s “counsel suggested at oral arguments that the record did not contain evidence that Towne Properties let tenants out of their leases…’the record, however, does appear to contain such testimony.”

In the Lindsay P. v.Towne Properties Asset Management Co., Ltd. opinion the court  states that “it is cognizant that the criminal acts of third parties are very difficult to predict and that a landlord does not generally have a duty to protect its tenants from the criminal acts of third parties.  However, there are issues of fact regarding whether Towne Properties should have reasonably foreseen Haynes’s criminal activity.”

Haynes was apprehended by the police, was tried and convicted of rape and aggravated burglary and was sentenced to nine years in prison.

Failure to Follow DMCA Safe Harbor Requirements Leads to Stormy Seas

Recent cases suggest that Internet Service Providers or “ISPs” need to understand, and act upon, the statutory requirements associated with the safe harbor provisions of the Digital Millennium Copyright Act(“DMCA”).  Recall that the DMCA’s safe harbor provisions protect service providers from copyright liability related to user generated content that might infringe the rights of a third party copyright holder.

In order to qualify for safe harbor protection, the service provider must first adhere to certain requirements including the following:

            (i)         be a “service provider” as that term is defined in the DMCA;

            (ii)        adopt and implement a repeat infringer policy; and

(iii)       not interfere with technical measures copyright owners use to protect their copyrighted works.

Once it is determined that the ISP meets the necessary qualifications for safe harbor protection, the next part of the analysis includes whether the ISP had

(i)         actual knowledge of the infringement at issue (referred to as the “red flag” test);

(ii)        whether the ISP received any direct financial benefit as a result of the infringement; and 

(iii)       whether the ISP acted quickly to disable the infringing material.

In a recent Southern District of New York case, Capitol Records v. Vimeo, the court refused to recognize that, as a matter of law, all content that was the subject of claims brought by Capitol Records and EMI Blackwood Music against Vimeo, a video upload site, fell under the safeguards provided by the DMCA’s safe harbor.  While the court did find that much of the content did fall under the act’s protection, the court also found that a sizeable portion of the content required a fact finder’s assessment in order to properly determine if the statutory requirements were properly followed.

In Vimeo, certain materials had been uploaded by employees of the site itself, which raised the issue of whether the content was user directed or uploaded as a result of the site’s own employees.  In fact, labels identifying the content as having been uploaded by “STAFF” were included on the site to identify the related content.  In addition, raising the “red flag” rule, Vimeo employees had placed certain content in specific sections or categories of the site including on employee only channels and, moreover, employees had commented on some of the content as well.  As a result, the court found that the content associated with these actions presented triable issues of fact.

It should also be noted that this case follows on the heels of a recent U.S. District Court for the Southern District of Florida case, Disney Enterprises, Inc. v. Hotfile Corp. that found no safe harbor protection where a site failed to take action against repeat infringers after receiving proper takedown notices by rights holders.

Florida Legislator Looks to Restrict Employer Access to Employee Social Media Accounts

Florida, a state that is generally considered to be friendly to employers will be taking steps to protect employee and prospective employee privacy if a South Florida State Senator has his way.

Florida State Senator, Jeff Clemens of Lake Worth, wants Florida to join the growing list of states that restrict employer access to employee or prospective employee social media accounts.  The proposed bill defines a social media account as “an interactive account or profile that an individual establishes and uses through an electronic application, service, or platform used to generate or store content, including, but not limited to, videos, still photographs, blogs, video blogs, instant messages, audio recordings, or e-mail that is not available to the general public.”  The bill would restrict employers from doing the following:

(a) Requesting or requiring that an employee or prospective employee disclose a username, password, or other means of access to a social media account through an electronic communications device;

(b) Requesting or requiring an employee or prospective employee take action that allows the employer to gain access to the employee’s or prospective employee’s social media account if the account’s contents are not available to the general public;

(c)  Retaliating against an employee for refusing to give the employer access to the social media account; and

(d)  Failing or refusing to hire a prospective employee as a result of a prospective employee’s refusal to allow the employer access to the prospective employee’s social media account.

Thirty-six states have already taken similar action with 11 already enacting statutes including California, Michigan, Maryland and Colorado. Some, including New Jersey governor, Chris Christie, have questioned the broad scope of such laws. Nevertheless, Governor Christie did recently sign such legislation into law, which takes effect December 1^st of this year.  See States Continue to Enact Privacy Laws Protecting Employees from Employers.

The proposed Florida bill would enable an employee or prospective employee to bring a civil action against the employer within two years after the violation and also provides for the seeking of injunctive relief.  If the Florida bill is passed in its current form it would take effect on October 1^st of next year.

Equifax, Transunion, Experian and FACEBOOK!!??

Might lenders start reviewing your social media activities to determine your creditworthiness?

Erika Eichelberger wrote a sobering piece in Mother Jones last month addressing that very issue.  Actually, Eichelberger points out that some lenders are already engaging in the practice and that it could only be a matter of time before mainstream lenders begin doing the same.

Eichelberger reports that lenders who use information found on social media sites argue “that they are able to serve borrowers that traditional banks deem risky because they are able to evaluate credit risk based on more subtle social media-based indicators.”  These indicators include the number of friends applicants have, how often they interact ad even the quality and quantity of one’s LinkedIn contacts “for clues to how quickly laid-off borrowers will be rehired.”

The practice which is currently being used primarily by lenders providing loans to low-income borrowers raises issues of both credibility and fairness.  Does the information available on social media sites really provide valuable information when assessing a potential borrower and is it being applied in a fair and non-discriminatory manner?  The two key laws applicable in this area are The Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA).  The FCRA provides citizens with certain rights related to the use and disclosure of their personal information by credit reporting agencies.  The ECOA seeks to provide equal opportunity to customers of banks, credit card companies, loan and finance companies and others.  It prohibits discrimination against applicants based on race, color, religion, national origin, sex or marital status and age. Eichelberger notes that critics of the practice question whether the information provided is truly indicative of the likelihood of repayment on the part of a prospective borrower.  Quoting Ashkan Soltani, an independent expert on consumer privacy and behavioral economics, “For you and I to call each other friends in the real world, we’d have to hang out a lot’…’I might follow you on Facebook because you post funny cat pictures.”  In addition, Eichelberger writes that experts say these lenders may be “discriminating against applicants who essentially appear socially undesirable’…’But discrimination law does not yet cover people who are unpopular.” 

NY Attorney General Takes Steps to Combat Fake Social Media Reviews

Gartner predicts that by 2014 between 10% and 15% of social media reviews will be fake. This information was provided by the New York Attorney General’s office, which announced an agreement recently with 19 companies to stop them from writing fake online reviews.

 

New York Attorney General, Eric T. Schneiderman, stated that the companies would be required to pay penalties ranging from $2,500.00 to just under $100,000.00.  Many of the companies had apparently created fake online profiles on various consumer review websites, such as Yelp, Google Local and CitySearch, and outsourced the review writing to freelancers in the Philippines, Bangladesh and Eastern Europe.  The announcement said that the false reviews violated multiple state laws against false advertising and that the companies had engaged in illegal and deceptive business practices.

The announcement revealed that under the guise of a yogurt store, the AG’s office had contacted “leading SEO companies” in New York to request assistance in combating poor reviews on the consumer sites.  Some of the SEO companies responded by offering to write positive reviews on the company’s behalf, which they said fell under their reputation management services.  It was further revealed that several of  the SEO firms had been using advanced IP spoofing techniques to hide their identities and, moreover, were setting up hundred of fake profiles.

The practice of writing fake reviews that a reasonable consumer would believe has been prepared by a neutral third-party is referred to as “astroturfing.”  Interestingly, the AG’s announcement cited a 2011 Harvard Business School study that estimated a one-star rating improvement could translate to an increase of 5% to 9% in revenues for a restaurant. 

You can read the AG’s entire announcement here.

On Second Thought…Delete My Post!

Imagine having the right to demand that websites you have posted on take down the content or information that you later regret having posted.  California is on its way to enacting such a law, albeit for the benefit of minors only.

 

California filed what is referred to as an “eraser” law with its Secretary of State on September 23^rd.  If Governor Jerry Brown does not veto the bill, which he apparently has taken no position on, it will go into effect as of January 1, 2015.  The New York Times quoted James Steyer, the chief executive of Common Sense Media, an advocacy group that supported the bill, as stating, “Kids and teenagers often self-reveal before they self-reflect…It’s a very important milestone.”

The bill, Chapter 21 of Division 8 of California’s Business and Professional Code would require “the operator of an Internet Web site, online service, online application, or mobile application to permit a minor, who is a registered user of the operator’s Internet Web site, online service, online application, or mobile application, to remove, or to request and obtain removal of, content or information posted on the operator’s Internet Web site, service, or application by the minor, unless the content or information was posted by a 3rd party, any other provision of state or federal law requires the operator or 3rd party to maintain the content or information, or the operator anonymizes the content or information.”  Moreover, the bill would require the site to notify the minor that the minor has such a right.

Concerns about the legislation, identified in Somini Segupta’s piece in the New York Times, include the fact that companies will be able to collect more information on minors as they would need to identify their age and presence in California and, further, that the passage of similar laws in other states could create a hodgepodge of varied laws with varied requirements throughout the nation.  This latter concern, however, is seemingly endemic of the U.S.’s approach to privacy protection in general, which tends to be ad hoc on a state level and industry specific on the federal level.

There has been ongoing pressure in Europe for “right to-be-forgotten” legislation, which differs from California’s legislation in that it would provide for a similar “eraser” right for all Europeans regardless of age.

You can find the proposed California legislation here.  

Turns Out “Like”ing Something on Facebook Constitutes Actual Speech

The Fourth Circuit Court of Appeals ruled today that “Liking” something on Facebook constitutes protected speech.

In an important, but hardly surprising, decision, the court reversed a ruling by federal district judge, Raymond A. Jackson. In a decision that must have upset admirers of symbolic and actual speech everywhere, Judge Jackson ruled that a Facebook “like” was “insufficient speech to merit constitutional protection.” The lower court judge distinguished the Facebook “like” by noting that in other opinions recognizing protected speech on Facebook “actual statements” were used.”  Regardless, if one should ever come upon a sign while driving that simply says “stop” assume it is an actual statement.

The case stems from a lawsuit brought by a group of deputy sheriffs in Hampton, Virginia, one of whom, Daniel Ray Carter, Jr., claimed to have been fired from his job because he had “liked” the individual running in a campaign against the current sheriff (i.e. his boss). The Fourth Circuit’s Chief Judge William Byrd Traxler writes, “Once one understands the nature of what Carter did by liking the Campaign Page, it becomes apparent that his conduct qualifies as speech. On the most basic level, clicking on the “like” button literally causes to be published the statement that the User “likes” something, which is itself a substantive statement.”  Chief Judge Traxler also noted that “Carter’s speech was political speech, which is entitled to the highest level of protection.”

The case is Bland v. Roberts.  You can read the 81 page decision in its entirety here.

State Social Media Privacy Legislation Now an Issue for Securities Regulators

The Financial Services Institute, which represents individual financial services firms and individual financial advisors, warned that 70 social media bills introduced throughout the U.S. could conflict with Finra advisor regulations.

An article in Financial Advisor magazine said that a spokesman for the North American Securities Administrators Association expressed concern that privacy provisions in the bills might interfere with supervisory and record-keeping responsibilities of advisors under state and federal securities laws and regulations.

Recall that many states have started to pass legislation restricting employers’ ability to acquire employee passwords or gain other means of access to employee social media accounts.  In his Financial Advisor article, Ted Knutson reports that Finra has been in contact with 12 states about the legislation. In the organization’s letter to the Colorado legislature, it noted that “the objective may be accomplished through a specific exemption for broker-dealers whose employees use a personal account or service for business communications.”

While courts continue to deal with the ongoing challenge of applying traditional legal doctrine to social media platforms, it is also worth noting how regulators must now contemplate not only social media itself but the way both current and future laws passed in response to social media will impact their own regulations.

Facebook Posts Lead to Judge Tossing Verdict

Facebook posts may have played a role in a Georgia judge throwing out a plaintiff's verdict.

The suit involved a claim brought by Michael Bowbliss, who suffered nerve damage as a result of a lab technician's failure to properly draw blood for a routine, insurance related blood test. The award, originally for 5.7 million dollars, was first reduced by State Court Judge Patsy Porter to 4 million dollars, and then further reduced after the judge questioned Bowbliss's spouse's award for consortium damages, which exceeded Bowbliss's award for his original injury.  However, the Georgia judge eventually eliminated the entire verdict as a sanction against the couple for perpetrating a fraud upon the court.  Evidence, including the couple's Facebook posts, seemed to indicate that the couple had been in a troubled marriage during the time Dee Anna Bowbliss was seeking loss of consortium damages.  The attorneys for the defense claimed the marriage itself was a sham and that the Bowbliss's intention was to divorce after the completion of the trial. Moreover, the plaintiff's Facebook posts indicated that his injuries may not have been as severe as professed to the court.  One such post included, "can not go to gym til lawsuit over...due to it not looking right for me to be working out...and saying I have a bad arm."  With respect to the defense attorney's "sham marriage" assertion, one of the plaintiff's other posts read ""Judge is f[**]king on my case...dee and I aren't divorced yet because of piece of s[**]t judge and case."

Although the attorneys for defendant, Quick-Med, Inc. and its parent Quest Diagnostics, requested that the suit be dismissed with prejudice, Judge Porter refused.  The plaintiff's attorneys have already refiled the case.

Read more about this case in The Daily Report.

Harvard Law Professor Sends Message on Copyright in the Digital Age…and it Requires an Answer in 21 Days

Lawrence Lessig , copyright scholar and Harvard Law School professor, sued Liberation Music in federal court last week seeking damages for Liberation’s “knowing and material misrepresentation that’ he ‘infringed Liberation’s copyright interests.”

 

Lessig, who posts many of his “Open” lectures on YouTube, included in one such lecture clips from videos created by amateurs, which all include people dancing to the song, “Lisztomania,” by the French band, Phoenix.  Liberation, who claims the right to license the song, submitted a Digital Millenium Copyright Act (DMCA) takedown notice to YouTube claiming that it was hosting material that infringed Liberation’s copyright in the song.  Recall that pursuant to §512 of the DMCA online service providers are granted a “safe harbor” as long as they meet certain requirements.  These requirements include maintaining a notice and takedown system that allows owners of copyrighted material to submit a “takedown notice” to the provider.  Among other requirements, the party submitting the notice must assert a “good faith belief” that the material’s use on the site is not authorized by either the copyright owner or the law.

In his complaint, Professor Lessig argues that Liberation knows that his use of the song, in association with the clips, is consistent with a fair use affirmative defense and, consequently, does not infringe.  The statutory factors when making a fair use analysis include (i) the purpose and character of the use; (ii) the nature of the copyrighted work; (iii) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (iv) the effect of the use on the potential market for or value of the copyrighted work.  The complaint goes on to analyze the factors as follows: (i) the purpose and character is non-commercial and highly transformative as it is meant to educate and not entertain or make money, (ii) the nature is creative, which ordinarily leans toward the copyright holder, but in this case Lessig’s use of the song did not compromise “Phoenix’s or the defendant’s rights to control the first appearance of the song, (iii) the amount was minimal, ranging in length from 10 seconds to 47 seconds, and (iv) there was no market harm as the “Open” lecture “is not a market substitute for the song’ and ‘the lecture did not harm any market for the song.”

Per the complaint, Lessig claims to have been injured in the form of financial and personal expenses, harm to his free speech rights under the First Amendment and attorneys’ fees and costs.

An article about the suit in The Boston Globe notes that Daniel Nazer, an attorney with the Electronic Frontier Foundation, who is also listed on the complaint, “said the lawsuit is about more than an academic lecture on YouTube; the plaintiffs want to send a message about how copyright law is used in the digital era.”