Wednesday, February 6, 2013

Social Media Legal Woes

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).

I tried uploading other apps similar to Instagram, some with even better filters, but unfortunately, none came close. So, instead of being radical and shutting down my Instagram account, I’ve continued uploading images with the awesome filters and realized this is one battle we won’t win.

Finger, R. (2012, October 15). Just Another Lawsuit Against Facebook.....Maybe Not. Forbes. Retrieved February 6, 2013 from

Oremus, W. (2012, December 19).  Everyone Is Ignoring the Much Bigger Problems With Instagram's New Privacy Policy. Slate. Retrieved February 6, 2013 from   

Schaefer, S. (2012, December 17). Morgan Stanley Hit With $5 Million Fine Over Facebook IPO. Forbes. Retrieved February 6, 2013 from