A federal district court in Illinois allowed claims for vicarious and direct copyright infringement to proceed against an employee of the Chicago Cubs Baseball Club for retweeting a third-party tweet containing the plaintiff’s copyrighted material. Read the opinion.

Thinking of backing Biden in November? Would his unequivocal opinion on Section 230 of the Communications Decency Act affect your decision?

In an opinion important to platforms that monetize user-generated content, the U.S. Court of Appeals for the Ninth Circuit held the safe harbor provisions in §512(c) of the Digital Millennium Copyright Act (DMCA) did not exempt Zazzle—a company that creates and sells items such as t-shirts and mugs bearing images uploaded by users—from copyright liability for willfully infringing 35 separate copyrighted works. In one of this blog’s most popular posts ever, I explain how platforms that commercialize their user-generated content can reduce their risk.

The advertising industry and the U.S. Chamber of Commerce are encouraging California Attorney General Xavier Becerra to postpone the anticipated July enforcement of the California Consumer Privacy Act, citing the law’s complexity.

The estate of the late musician Prince successfully brought a copyright infringement claim against an individual who unofficially recorded and uploaded videos containing performances of copyrighted songs. Accordingly to a federal district court in Massachusetts, the videos do not qualify for the fair use exception to copyright infringement because the uploader/defendant “did not imbue Prince’s musical compositions with new meaning or add any of his own expression to the underlying works.” Read more of the court’s reasoning.

In a controversy as old as the Internet itself, Germans are debating whether social media users should be permitted to remain anonymous.

Actor Steven Seagal will pay more than $300,000 to resolve U.S. Securities and Exchange Commission claims that he failed to tell Twitter and Facebook followers he was being paid to promote an initial coin offering.

Twitter has a special process for reviewing tweets by public figures—including President Trump—that have been flagged for potentially violating the platform’s rules. This profile of Twitter’s top lawyer, Vijaya Gadde, describes it.

The Federal Trade Commission (FTC) appears to be using its ongoing review of current rules and guides to revisit its approach to driving home the message that the relationship between a social media “influencer” and the brand he or she is endorsing must be disclosed. As we have described previously, the FTC has interpreted its Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Endorsement Guides”) to require that online advertisements — like all other advertising — clearly and conspicuously disclose material connections between endorsers (i.e., influencers) and the brands they promote because such connections may affect the credibility of the endorsement. And, in recent years, the FTC has — through enforcement actions, press releases, guidance, closing letters, and letters sent directly to endorsers (including prominent public figures) — made clear its belief that: (1) appropriate disclosures by influencers are essential to protecting consumers; and (2) in too many instances, such disclosures are absent from celebrity or other influencer endorsements.

Now, in connection with a request for comments on the Endorsement Guides, FTC Commissioner Rohit Chopra has issued a scathing statement calling on the FTC to “take bold steps to safeguard our digital economy from lies, distortions, and disinformation.” In this regard, Commissioner Chopra suggests that the FTC’s efforts to date have not been effective in “deterring misconduct in the marketplace” relating to inauthentic and fake reviews, and that, in particular, elements of the Endorsement Guides should be codified as formal rules so that violators can be liable for civil penalties and damages under the FTC Act.

Also of note is that Commissioner Chopra has asserted that the FTC should refocus its efforts on advertisers themselves, and not the influencers that promote their brands.  According to the Commissioner, “when companies launder advertising by paying someone for a seemingly authentic endorsement or review, this is illegal payola,” and “companies paying for undisclosed influencer endorsements and reviews are not [being] held fully accountable for this illegal activity.” Seeking to aggressively penalize advertisers themselves would be a shift in emphasis for the FTC, as its recent efforts to combat inadequate disclosures in influencer advertising have focused on influencers. For example, the FTC recently produced a brochure detailing the responsibility of influencers “to make [required] disclosures, to be familiar with the Endorsement Guides, and to comply with laws against deceptive ads.” The FTC also brought an enforcement action against influencers, and foreshadowed that more enforcement will happen in the future.

Continue Reading Fake News & Paid Reviews: FTC Seeks Comments on its Endorsement Guides

New York courts are increasingly ordering the production of social media posts in discovery, including personal messages and pictures, if they shed light on pending litigation. Nonetheless, courts remain cognizant of privacy concerns, requiring parties seeking social media discovery to avoid broad requests akin to fishing expeditions.

In early 2018, in Forman v. Henkin, the New York State Court of Appeals laid out a two-part test to determine if someone’s social media should be produced: “first consider the nature of the event giving rise to the litigation and the injuries claimed . . . to assess whether relevant material is likely to be found on the Facebook account. Second, balanc[e] the potential utility of the information sought against any specific ‘privacy’ or other concerns raised by the account holder.”

The Court of Appeals left it to lower New York courts to struggle over the level of protection social media should be afforded in discovery. Since this decision, New York courts have begun to flesh out how to apply the Forman test.

In Renaissance Equity Holdings LLC v. Webber, former Bad Girls Club cast member Mercedes Webber, or “Benze Lohan,” was embroiled in a succession suit. Ms. Webber wanted to continue to live in her mother’s rent controlled apartment after the death of her mother. To prevail, Ms. Webber had to show that she had lived at the apartment for a least two years prior to her mother’s death. Continue Reading Are Facebook Posts Discoverable? Application of the Forman Test in N.Y.

Every day, social media users upload millions of images to their accounts; each day 350 million photos are uploaded to Facebook alone. Many social media websites make users’ information and images available to anyone with a web browser. The wealth of public information available on social media is immensely valuable, and the practice of webscraping—third parties using bots to scrape public information from websites to monetize the information—is increasingly common.

The photographs on social media sites raise thorny issues because they feature individuals’ biometric data—a type of data that is essentially immutable and highly personal. Because of the heighted privacy concerns, collecting, analyzing and selling biometric data was long considered taboo by tech companies — at least until Clearview AI launched its facial recognition software.

Clearview AI’s Facial Recognition Database

In 2016, a developer named Hoan Ton-That began creating a facial recognition algorithm. In 2017, after refining the algorithm, Ton-That, along with his business partner Richard Schwartz (former advisor to Rudy Giuliani) founded Clearview AI and began marketing its facial recognition software to law enforcement agencies. Clearview AI reportedly populates its photo database with publicly available images scraped from social media sites, including Facebook, YouTube, Twitter, and Venmo, and many others. The New York Times reported that the database has amassed more than three billion images. Continue Reading Clearview AI and the Legal Challenges Facing Facial Recognition Databases

Socially Aware contributors Alex Lawrence and Kristina Ehle authored an article for the Computer Law Review International that discusses the impact of the hiQ Labs v. LinkedIn decision from the U.S. Court of Appeals for the Ninth Circuit, which holds that automated scraping of publicly accessible data does not violate the Computer Fraud and Abuse Act.

“While some may interpret the LinkedIn decision as greenlighting [unauthorized webscraping], this would be a mistake,” the authors wrote. “On close review of the decision, and in light of other decisions that have held unauthorized webscrapers liable, the conduct remains vulnerable to legal challenge in the United States.”

The authors added that the court “expressed concern that LinkedIn sent the cease-and-desist letter because it planned to create a new product that competed with hiQ’s services, which the court held could raise concerns under California’s unfair competition laws,” and noted that, to avoid such claims under U.S. law, “unauthorized webscrapers should be addressed promptly before they free ride for years and build a business off your data.”

Read the full article.

On December 19, 2019, the Staff of the U.S. Securities and Exchange Commission’s Division of Corporation Finance issued guidance outlining the Staff’s views about disclosure obligations that companies should consider with respect to technology, data and intellectual property risks that could arise when operations take place outside the United States. Companies should consider this guidance when preparing risk factor and other disclosures included in upcoming periodic reports and registration statements.

Background

The Staff notes that the SEC’s principles-based disclosure regime recognizes that new risks may arise over time, affecting different companies in different ways. For those companies that conduct business operations outside the United States, risks can arise for technology and intellectual property, particularly when operations take place in jurisdictions that do not provide protection that is comparable to the United States. The Staff observes that companies may be exposed to material risks of “theft of proprietary technology and other intellectual property, including technical data, business processes, data sets or other sensitive information.” Exposure to such risks can be heightened when companies conduct business in some foreign jurisdictions, house technology, data and intellectual property abroad, or license technology to joint ventures with foreign partners. Continue Reading SEC Staff Issues Guidance on Technology, Data & IP Risks in International Operations

In a move that might be part of a settlement that YouTube has entered into with the Federal Trade Commission, the video-sharing site said it will ban “targeted” advertisements on videos likely to be watched by children. Because targeted ads rely on information collected about the platform’s users, displaying such ads to children younger than 13 without parental permission violates the Children’s Online Privacy Act (COPPA). Until now, YouTube has avoided banning targeted ads on its primary site, arguing that children should only be using YouTube Kids, a site that is free of targeted ads.

Twitter announced plans to change several aspects of its platform. One of the new features that the company is researching would allow users to control who—if anyone—may respond to their tweets. Inspired by Twitter’s desire to give users control over how far their tweets spread, the feature should be available later this year. Read about other plans that the platform has in store.

In anticipation of the 2020 election, Facebook said it will remove from its platform deep fakes, heavily altered content likely to mislead Facebook’s users.

Supporters of Section 230 of the Communications Decency Act, which protects online platforms from liability for user-generated content, are playing defense again, this time from House Speaker Nancy Pelosi, who wants the statute’s language sheltering web companies from liability stripped from the United States’ trade pact with Mexico and Canada. Find out why.

New York State Governor Andrew Cuomo proposed legislation that would make it a crime for convicted sex offenders to misrepresent themselves online. It also would require sex offenders to disclose to the Division of Criminal Justice Services the screen names they use for each of their social media accounts, dating apps and gaming apps.

Tesla chief executive Elon Musk’s tweet using the phrase “pedo guy” to refer to a man who had insulted Musk during a television interview did not amount to defamation, a California federal court jury found. Learn the basis of their decision.

As we reported late last year, in an effort to protect users’ mental health, the social media platform Instagram is phasing out popularity metrics such as “likes.” With such popularity metrics invisible to users, follower engagement—which brands use to determine an influencer’s value—will be demonstrated mostly in the form of comments. Because, on Instagram, comments are largely driven by captions, the quality of captions will be a major factor in determining which influencers continue to be successful on that platform despite the fact that it is primarily visual, one columnist argues.

Speaking of influencers, eight-year-old Ryan of Ryan’s World makes earning a living as an influencer look easy, having raked in $26 million in 2019 by posting videos like the one of him running around his garden to scoop up plastic eggs with toys inside them. But, the BBC reports, Ryan is something of an “outlier,” and “96.5% of YouTubers don’t make enough from advertising revenue alone to break the US poverty line.” Find out the names of the other top-ten highest earning influencers.

Here at Socially Aware we covered a wide range of issues in 2019. We reviewed an opinion reminding us that user-generated content posted on social media platforms is not necessarily freely available for use in other contexts, and a rare instance of a federal district court holding that a browsewrap agreement was enforceable.

We also examined some aspects of Internet law in Europe, including the legality of using “cookie walls” in the European Union, and the EU Copyright Directive’s impact on content-sharing service providers’ liability for copyright-infringing content.

And, as we’ve done in past years, we revisited the scope of the “safe harbor” that Section 230 of the Communications Decency Act provides again, again, and again.

But none of those topics—except the CDA’s Section 230—are on our list of the top-ten most read articles of 2019. Here are the pieces that made the cut:

  1. The Company Who Cried “General Audience”: Google and YouTube to Pay $170 Million for Alleged COPPA Violations
  2. How to Comply with the Revised Ephemeral-Messaging Provision in the DOJ’s Corporate Enforcement Policy
  3. By Winning Motion to Dismiss, Supermodel Loses Chance to Clarify Whether She Can Lawfully Post Photos of Herself to Social Media
  4. Will the Music Industry Continue To Win Its Copyright Battle Against ISPs?
  5. Time to Hit Pause: Copyright Infringement on User-Generated Platforms – When Is the Platform Provider Liable for Damages?
  6. The Meme Generation: Social Media Platforms Address Content Curation
  7. Court Holds That Arbitration Clause in “Hybridwrap” Terms Is Unenforceable
  8. Insta-Mural Infringement: Public Art in Instagram Ad Leads to Copyright Claim
  9. California Court Finds Section 230 Protects Decision to Suspend and Ban Twitter Account
  10. Ninth Circuit’s LinkedIn Decision Does Not Greenlight the Unauthorized Web Scraping of Public Websites

A random Twitter account tags a Japanese company and badmouths it in a series of tweets. Because the tweets are tagged, a search of the company’s name on Twitter will display the tweets with the negative comments among the search results. Upset over the tweets, the Japanese company wants to sue the tweeter in Japan. But how can it? The tweeter has not used his real name.

This is where discovery under 28 U.S.C. § 1782 can help. Section 1782 provides a vehicle for companies or individuals seeking U.S. discovery in aid of foreign litigation—even if the litigation is merely contemplated and not yet commenced. Specifically, Section 1782 provides that a federal district court may grant an applicant the authority to issue subpoenas in the United States to obtain documents or testimony, including documents or testimony seeking to unmask an anonymous Internet poster to pursue defamation claims abroad.

To pursue Section 1782 discovery, an applicant needs to establish:

  • that the requested discovery is for use in an actual or contemplated proceeding in a foreign or international tribunal;
  • that the applicant is an “interested person” in that proceeding; and
  • that the person from whom the discovery is sought resides or is found in the district of the court where the applicant is making the application.

Continue Reading Foreign Companies Can Use 28 U.S.C. § 1782 to Unmask Anonymous Internet Posters

The high-end skincare brand Sunday Riley has settled lawsuits filed by the Federal Trade Commission claiming that the brand’s founder encouraged employees of her eponymous company to set up accounts “under different identities” on the cosmetics retail site Sephora.com and leave positive reviews for Sunday Riley’s products. The FTC filed the complaints after the agency conducted an investigation that was prompted by a whistle blower’s post on REDDIT last year. Read about the settlement’s lenient terms, which two of the FTC’s five commissioners don’t believe are severe enough to deter other companies from attempting to post fraudulent reviews online.

Last month four senators—three Democrats and one Republican—introduced a bipartisan bill to require communications platforms to provide their users with a means of exporting the data that their users have accumulated on the platforms, such as friends lists. The rationale behind the legislation: making it easier for smaller platforms to compete with the likes of social media giants like Facebook and YouTube. Legislation like this is intended to benefit consumers and would require “operability standards to be revised” as interfaces evolve, writes Forbes columnist Robert Seamans. The real challenge, he argues, would be determining the types of data covered by the legislation.

Twitter announced it will extend to all of its users around the world the “Hide Replies” feature that it first tested in Canada in July and then rolled out in the United States and Japan in September. The feature allows users to “hide” any replies to their tweets. However, other Twitter users may view and respond to hidden replies by clicking a grey icon that appears on the tweets. Twitter’s blog reports that the platform’s test runs of the Hide Replies feature revealed that “27% of people who had their Tweets hidden said they would reconsider how they interact with others in the future,” and Twitter posters who hid replies “may want to take further action after [they] hide a reply, so now [Twitter will] check to see if you want to also block the replier.” This isn’t the first action that Twitter has taken to control trolls, and the platform’s blog promises that it won’t be the last.

Influencer culture has infiltrated the world of cybersecurity, with the Twitter accounts of several popular experts in that increasingly prominent field running ads for Lenovo’s “ThinkShield” line of products and services. VizSense, an influencer marker, reached out to the influencers, who included journalists, a former intelligence operative, and experts in areas like artificial intelligence, each with more than 10,000 Twitter followers apiece. Find out why the campaign sparked controversy in the cybersecurity community.

Speaking of influencers, guess what Bloomberg reports is now the number one career aspiration of the “overwhelming majority” of young Americans? Sigh.