With the amazing growth of social networking and social
media, it’s only natural that there be legal implications resulting from the
millions of users that participate in it daily.
For millions of users to be on any given platform, such as
Facebook and Twitter, those numbers ring loudly with advertisers and affiliate
partners. They want your attention, especially if they can gear their
advertisements towards the specific demographic they want.
As a result of the bottom line, the privacy policies from
these social networks has changed to include the distribution of personal
information to affiliates and advertisers. This hasn’t gone without notice from
the general public.
Here are just three legal controversies that have taken
place in the social media world in the last year:
1) Morgan Stanley
& Co. LLC vs. Commonwealth of Massachusetts
December 2012, Morgan
Stanley was sued by a Massachusetts regulator for “violating the terms of a 2003 settlement that involved 10 brokerage firms being penalized for allowing investment bankers to influence research functions during the dotcom bubble,”
as covered in Forbes. This occurred after Facebook went public in May of 2012 and “stocks falling flat shortly after” (Schaefer, ¶1).
With Wall Street banks informing only certain clients and
not all investors of their views on the growth outlook for Facebook, those
investors that were left out of the loop complained and sued.
Also sued were Facebook and its executives. BBC reported on
the same issue in a broader view in this clip:
First of all, with Facebook being the largest social media
network with the most amount of users, it’s 95% guaranteed that most social
media legal controversies will include them in some way, shape or form. As big
as they are and as much control as they have, they will forever have their
legal team busy in lawsuits.
As an avid user of Facebook, I understand that it’s a
business, but in essence what they sell is our information and what our hobbies
are to advertisers (I find that a little disturbing, but hey, I’m using it for
free).
With that being said, this lawsuit was completely merited.
The stock market is very tricky and can lead to huge legal implications if not
used fairly and with best practices. What Morgan Stanley and Facebook did
towards their investors was unethical, to say the least. That much was clear,
which is why Morgan Stanley paid the $5 million fine to settle the charges.
Steve Schaefer reported that even though Morgan Stanley paid the fine, they did
so “without admitting or denying wrongdoing” (¶2). I guess this is one of those gray
areas in life that money hungry people always seem to cross.
2) Facebook vs. Document
Security Systems (DSS)
Here we go again with Facebook…real shocker! In this lawsuit,
Facebook is being sued for patent infringement. Forbes contributor, Richard Finger stated, “The science behind these patents suggests that it facilitates
the storing, retrieving, and sharing of documents” (¶2). In a press release quoted
by Forbes read: “[These] innovations cover the manner in which users and
application developers on the Facebook platform make connections between
‘objects, photos, people, events, and pages’ – which is the very essence of
Facebook’s business” (Finger, ¶2).
All in all, the main way that Facebook has generated income
has been through a stolen intellectual property taken from DSS and they want to
make sure Facebook pays for it. It is estimated that Facebook could pay over
$300 million for this over the next few years. The hearing for this case will
be in July 2013 (Finger, ¶5).
This isn’t Facebook’s first run-in with stealing. The attorney’s
hired by DSS are the same that got a jury to convict Facebook of patent
infringement against Leader Technologies.
It’s time for Facebook to play fair! Hopefully DSS will get
their earnings for the IP of the science behind the main income generated for
Facebook. You would think a company as large and innovative as Facebook would
create their own IP and patents instead of taking it from others.
3) Instagram Privacy
Policy
Now this is more of a legal controversy than it is a legal case. This
happened just last month and uproar ensued from users everywhere (including
myself). Facebook purchased Instagram for a billion dollars, and that alone made
users uncomfortable (ok, so I tried
doing one without Facebook, but it just didn’t happen). Especially for addicted users of Instagram (definitely
talking about myself), when the new privacy policy came out, we were very
disappointed.
Why? Check out this excerpt from one of my favorite social media
blogs, Social Mouths:
I guess for a billion dollars, they need to try to make their
investment back somehow, so why not just sell all the rights of our users away
and make a ton of money doing it? Unfortunately for us, unlike Facebook and
Twitter, with Instagram, there’s no “opt-out”. As Will Oremus wrote in Everyone Is Ignoring the Much Bigger Problems With Instagram's New Privacy Policy, it’s a
“take it or leave it” situation (¶3).
References:
Finger, R. (2012, October 15). Just Another Lawsuit Against Facebook.....Maybe Not. Forbes. Retrieved February 6, 2013 from http://www.forbes.com/sites/richardfinger/2012/10/15/just-another-lawsuit-against-facebook-maybe-not/
Oremus, W. (2012, December 19). Everyone Is Ignoring the Much Bigger Problems With Instagram's New Privacy Policy. Slate. Retrieved February 6, 2013 from http://www.slate.com/blogs/future_tense/2012/12/19/instagram_privacy_everyone_s_ignoring_the_real_problems_with_its_terms_of.html
Schaefer, S. (2012, December 17). Morgan Stanley Hit With $5 Million Fine Over Facebook IPO. Forbes. Retrieved February 6, 2013 from http://www.forbes.com/sites/steveschaefer/2012/12/17/morgan-stanley-hit-with-5-million-fine-over-facebook-ipo-by-massachusetts/
