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Socially Aware Blog

The Law and Business of Social Media

Hot Off the Press: The July Issue of Our Socially Aware Newsletter Is Now Available

Posted in FTC, IP, Litigation, Privacy, Terms of Use, UK High Court

The latest issue of our Socially Aware newsletter is now available here.

Welcome to a special privacy issue of Socially Aware, focusing on recent privacy law developments relating to social media and the Internet. In this issue, we analyze a controversial European ruling that strengthens the right to be forgotten; we examine a recent California Attorney General report regarding best practices for compliance with the updated California Online Privacy Protection Act; we summarize the FTC’s recent settlement with Snapchat and its broader implications for mobile app developers; we report on a case filed by a French consumer association accusing three major social networking sites of using confusing and unlawful online privacy policies and terms of use; and we highlight the growing popularity of anonymous social apps and the security risks that they pose.

All this–plus a collection of thought-provoking statistics about online privacy…

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  • The New York Court of Appeals has struck down that state’s “cyberbullying” law in a 5-2 decision, finding that it is overly broad and chills First Amendment-protected speech. The case arose when a 15-year-old boy pleaded guilty under the law to creating a Facebook page that included graphic sexual comments alongside photos of classmates at his high school.
  • Twitter names a new CFO with a background as an investment banker at Goldman Sachs.  The growth in Twitter’s user base seems to have stalled, and some speculate that this appointment means that Twitter may be looking to make an acquisition or two.
  • Social media has become an essential law enforcement tool. A survey indicates that 86 percent of law enforcement agencies around the country are using social media in investigations — and more than half say they are using Facebook to create fake profiles for undercover investigations, which is a violation of Facebook’s terms of use.

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  • Twitter is rolling out a new type of advertising that reportedly has been very successful for Facebook’s mobile business — mobile-app install ads, which link directly to games and other apps in popular mobile app stores.
  • An Idaho state court affirmed the Idaho Industrial Commission’s denial of unemployment benefits to a nurse who was discharged after posting on Facebook about “a patient who is just being a jerk,” in violation of his employer’s Social and Electronic Media Conduct Policy.
  • According to a study conducted for the Association of National Advertisers, most brands are now using metrics to measure social media effectiveness. That said, “soft” metrics such as “likes” and clickthroughs are being used far more commonly than more sophisticated measures such as ROI and sales.

Social Media and Proxy Contests

Posted in SEC

As the use of social media continues to grow, social media is likely to play an increasingly more prominent role in proxy contests. In this context, the recent Compliance and Disclosure Interpretations issued by the SEC’s Division of Corporation Finance provide helpful clarifications on how social media outlets can be used in proxy contests in compliance with SEC regulations.

SOCIAL MEDIA’S IMPACT ON PROXY CONTESTS

Activist investors have used social media and have at times been able to “move the market” through social media statements in support of or against a public company. Carl Icahn first used Twitter to express his concerns against Dell Inc.’s buyout in 2013, referencing his interest in Dell in his first Twitter posting. Icahn also made extensive use of social media in the recent eBay, Inc proxy contest, in which Icahn pressured eBay to add two of Icahn’s nominees to eBay’s board of directors and to spin off eBay’s PayPal division. Icahn made multiple statements related to the eBay proxy contest through his personal Twitter account, including a link to an article about eBay’s corporate governance problems, links to letters on Icahn’s website supporting his position and criticizing eBay, and short jabs at eBay that could stand alone within the 140 character limitation of a Twitter post. Similarly, members of eBay’s board also used Twitter to announce their positions against Icahn in the proxy contest (In April 2014, Icahn and eBay reached an agreement that put one of Icahn’s nominees on the eBay board).

In the general effort to inform and persuade shareholders during a proxy contest, social media can be a powerful tool, and it can grab the attention of a larger audience. As Carl Icahn’s example suggests, social media can be used to make statements with a length and tone tailored to a specific social media platform, and to share links to information and analysis that provide more depth and greater disclosure to an interested reader.

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  • A Gallup survey found that a majority of Americans do not turn to social media when making purchasing decisions — but the survey appears to be flawed in several respects, especially because the information was gathered 18 months ago, which, let’s face it, is a virtual lifetime in social media marketing.
  • Google has begun to implement the newly recognized European “right to be forgotten” by removing personal data from its search engines in response to user requests. Other providers such as Microsoft are beginning the same process, and at least one company — France-based Reputation VIP — has launched a website to facilitate removal requests.
  • By the way, before we forget, this is what you’ll see when Google removes “forgotten” search results.  No word yet on what EU regulators think of this . . .
  • Social media and even video games have become crucial ways in which health professionals can convey important information about HIV prevention to people at high risk of infection.

Google Glass Into Europe – A Small Step or a Giant Leap?

Posted in Privacy, Wearable Computers

Google Glass (“Glass”) is the most high profile of the new wearable technologies that commentators predict will transform how we live and work.

Until now, the Android-powered glasses were only available in the U.S.  However, as of this week, Glass has been launched in the UK. Now, if you are 18 years old, have a UK credit card and address and a spare £1,000, you can purchase your own Glass and see what the fuss is all about.

Google has stated that it selected the UK for its second market because “[the UK] has a history of embracing technology, design and fashion and … there’s a resurgence happening in technology in the UK”.  But perhaps it is also because the UK’s data protection regulator, the Information Commissioner’s Office (ICO), has a reputation for being one of the more pragmatic privacy regulators in Europe. Because, for all its exciting technological benefits, Glass raises some thorny legal issues, in particular in relation to privacy.  In this alert we will address some of those key issues.

WHAT IS GOOGLE GLASS?

As many readers will already be aware, Glass is a form of wearable technology that gives its users hands-free access to a variety of smartphone features by attaching a highly compact head-mounted display system to a pair of specially designed eyeglass frames. The display system connects to a smartphone via Bluetooth. Glass can run specialised Android apps known as “Glassware”. In its current form, Glass can pull information from the web, take photographs, record videos, make and receive phone calls (via the Bluetooth smartphone connection), send messages via email or SMS, notify its user about messages and upcoming events, and provide navigation directions via GPS.  Although Glass is still in the testing stage and boasts only a modest set of features, the prototype device has already caused quite a stir. In particular, it has some triggered significant privacy concerns.

PRIVACY

In terms of privacy, Glass throws up a variety of issues. Due to its functionality, Glass is likely to process two types of data relating to individuals: (i) personal data and meta data relating to the wearer of the Glass (“Glass User”) and (ii) personal data and meta data relating to any member of the general public who may be photographed or recorded by the Glass User (“Public”).  In June 2013, a group of regulators and the Article 29 Working Party, wrote to Google inviting Google to enter into a dialogue over the privacy issues relating to Glass. The letter pointed out that the authorities have long emphasised the importance of privacy by design, but added that most of the authorities had not been approached by Google to discuss privacy issues in detail. In Google’s response it stated that protecting the security and privacy of users was one of its top priorities. Google also identified various steps that it has taken to address privacy concerns, including a ban on facial-recognition Glassware.

PERSONAL DATA OF GLASS USER

As with any smartphone, Google will collect personal data and other meta-data relating to each Glass User. Google will need to comply with its obligations under the UK’s Data Protection Act 1998 (DPA). A key element of such compliance will be putting in place an appropriate privacy policy for Glass Users. However, to date, Google has encountered some difficulties in this regard.

Indeed, in July 2013, the ICO wrote to Google confirming that Google’s updated privacy policy raised serious questions about its compliance with the DPA. In particular, the ICO believed that the updated policy did not provide sufficient information to enable UK users of Google’s services to understand how their data will be used across all of the company’s products. It stated that Google must amend its privacy policy, and failure to take necessary action would leave the company open to the possibility of formal enforcement action.

Google has argued consistently that its privacy policy complies with EU data protection law. To date, no formal action has been taken by the UK, although Google has faced action elsewhere in Europe (e.g. in Spain).

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