Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

Social

Search

sociallyaware-abajournalweb100-1

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

rubin_aaron_blog_150x150.png

rubin_aaron_common_640x280.jpg

rubin_aaron_heroretina_2700x1160.jpg

rubin_aaron_mobileretina_750x1040.jpg

rubin_aaron_social_600x600.jpg

Partner

We know trademarks. With a team of more than 25 lawyers, including Professor J. Thomas McCarthy, world-renowned author of the well-respected McCarthy on Trademarks and Unfair Competition, we are a one-stop practice for guarding valuable business assets.

Trademark

Band 1: Intellectual Property: Trademark, Copyright & Trade Secrets, California

Firm to Watch: Intellectual Property; Trade Marks, Copyright And Design

Firm to Watch: Intellectual Property: Trademarks: Non-Contentious

Silver: Firms: Enforcement and Litigation, California 

Bronze: Firms: Prosecution and Strategy, California

Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

gallick_lawrence_blog_150x150.png

gallick_lawrence_common_640x280.jpg

gallick_lawrence_heroretina_2700x1160.jpg

gallick_lawrence_mobileretina_750x1040.jpg

gallick_lawrence_social_600x600.jpg

Of Counsel

Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

ramirez_anthony_blog_150x150.png

ramirez_anthony_common_640x280.jpg

ramirez_anthony_heroretina_2700x1160.jpg

ramirez_anthony_mobileretina_750x1040.jpg

ramirez_anthony_social_600x600.jpg

Our M&A lawyers represent Fortune 500 companies, private equity firms, investment banks, and privately-held companies in their most high-profile and complex mergers and acquisitions.

Mergers + Acquisitions

M&A Lawyers & Capabilities

Ranked for M&A: Foreign Firms in Singapore

Ranked for Global Corporate/M&A 

Ranked in the “Elite” Category of Corporate/M&A – Nationwide

Ranked for Corporate/M&A – Northern California

Ranked Band 1 for California Corporate/M&A: Deals in Asia

Ranked in the “Highly Regarded” Category of New York Corporate/M&A

Ranked in the “Elite” Category of Corporate/M&A: International

Ranked Band 1 for Corporate/M&A in Japan

Ranked for Corporate/M&A: International in Singapore

Ranked for Corporate/M&A: Hong Kong-based (International Firms)

Ranked for Corporate/M&A: Mid-Market in Germany

Awarded Deal of the Year for Imerys Joint Venture with British Lithium

Two MoFo Japan Deals Shortlisted for M&A Deal of the Year (Premium)

Two MoFo China Deals Shortlisted M&A Deal of the Year (Premium and Midsize)

Five MoFo Lawyers Named to M&A Powerlist

Named a Leading Firm for M&A

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

favicon.ico

favicon-16x16.png

favicon-32x32.png

apple-touch-icon.png

MoFo Favicons

Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

Welcome to Socially Aware

240920-socially-aware-header.jpg

Welcome to Socially Aware

240920-socially-aware-header

Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

News and Announcements

Blog - Terms of Use

Blog - Privacy Policy

Blog - Blog Disclaimer

Blog - Attorney Advertising

morrison-foerster-blog-logo.png

Provides a data-driven look at the Federal Circuit.

Federal Circuitry

Brings together legal insights and in-depth analyses on trends and complex issues shaping the global technology industry.

MoFo Tech

Mofo Tech

Equips our clients with the most up-to-date and relevant information on employment and labor law issues.

Employment Law Commentary

In-depth analysis of developments and trends impacting government contracting.

Government Contracts Insight

Government Contracts Insights

Provides insights and reports on the most current class actions lawsuits and product liability issues that affect consumer-facing companies.

Class Dismissed Blog

Class Dismissed

MoFo’s Socially Aware blog provides timely updates and analysis of the many complex and cutting-edge legal and business issues arising out of social media.

Socially Aware

  Linkedin

MoFo LinkedIN

Socially Aware Blog - RSS

Stay Connected

Never miss a post from Socially Aware. Enter your email below to stay up-to-date.

Subscribe

The Law and Business of Social Media

Morrison Foerster - Footer

Blogs -  Home Button

Home

Blog - Topics

Web Scraping

Advertising

Antitrust

Arbitration

Artificial Intelligence

Asia

Autonomous Vehicles

Bankruptcy

Big Data

Blockchain

Class Actions

Cloud Computing

Compliance

Contracts

COPPA

Copyright

Crowdsourcing

Cyberbullying

Cybersecurity

Data Security

Defamation

Digital Content

Disappearing Content

Discovery

DMCA

E-Commerce

E-Discovery

E-Personation

Electronic Contracts

Employment Law

Endorsement Guides

Ephemeral Messaging

Ethics

European Union

Event

Fair Use

FDA Regulations

Financial Institutions

First Amendment

Fraud

Free Speech

GDPR

Hacking

Influencer Marketing

Infographic

Internet of Things

Investment Management Law

JOBS Act

Labor Law

Litigation

Live streaming

Marketing

Mobile

Online Contracts

Online Endorsements

Online Promotions

Online Reviews

Patent

Privacy

Product Liability

Protected Speech

Right of Publicity

Right To Be Forgotten

Section 230 Safe Harbor

Securities Law

Social Media Policy

Statistics

Status Updates

Stored Communications Act

Supreme Court

Terms of Use

UK High Court

User-Generated Content

Wearable Computers

Topics

Blog - Editors

Editors

Blog - About

About

Blog - Subscribe

More

Lawrence W. Gallick

Social Links: Statehouse v. Smartphone

Federal Court Enjoins California Teen Privacy Law . . . Again

All Your Sale Are Belong to Us - Mitigating IP and Payments Risk in In-Game Economies (Part II – User-Generated Content and In-Game Payment Models)

A New California Digital Content Law Establishes New Requirements for Advertisers and Vendors

California’s Assembly Bill 587 Loses Key Provisions After Legal Challenge from X

From our sister blog, <a href="http://www.mofotechblog.com/">MoFo Tech</a>:Widely applicable rules regarding consumer privacy disclosures in our increasingly mobile world are only now emerging. Government agencies, individual states, and professional associations are all weighing in on how mobile app developers should disclose how they collect, store, use, and protect the wide range of highly personal data being collected every day.The Application Privacy, Protection, and Security Act of 2013, better known as the APPS Act, is intended to bring conformity to the unwieldy world of mobile app development. With a divided Congress struggling to pass even mandatory legislation, though, passage of any type of discretionary legislation this year seems unlikely, says D. Reed Freeman Jr., a partner with Morrison & Foerster in Washington, D.C. In the meantime, Freeman says, developers should focus on the Federal Trade Commission, “because even without congressional action, it has broad jurisdiction, and it has already brought cases and issued guidance on mobile privacy and data security.”Charged with the intentionally broad mandate of guarding consumers from “deceptive” and “unfair” business practices, the FTC has been proactively applying its consumer protection laws across nearly all media, including mobile technology. A recent FTC policy document is especially revealing because it describes how the FTC expects disclosures of material facts to be made on mobile devices, “and privacy disclosures can certainly be material,” Freeman says.So it’s up to the mobile app company to think carefully about the ways its program could surprise a reasonable user and disclose them appropriately. Freeman offers this rule of thumb:  “Would a reasonable consumer, under the circumstances, understand what information is being collected about her while she’s on a mobile device and what it is being used for?” If so, companies need to disclose those facts clearly and not bury them in EULAs or terms of use.California’s Online Privacy Protection Act, passed in 2003, has taken consumer privacy one step further than the FTC has. It requires companies that operate commercial websites or online services and that collect personal information of any kind—including usernames and passwords—to prominently post a privacy policy somewhere on their homepage, says <a href="http://www.mofo.com/Andrew-B-Serwin/" target="_blank" rel="noopener">Andrew Serwin</a>, a partner in Morrison & Foerster’s San Diego office.And while California’s jurisdiction ends at the state line, its reach is often national, Serwin adds. “Companies with customers in all 50 states have to ask themselves whether they want to develop state-specific programs or apply standards across the board,” he says. Since the mobile world doesn’t recognize geographic boundaries, Serwin recommends that developers work toward the highest standards and beyond. “Privacy isn’t just a legal issue. It’s a brand issue,” he says.Apart from knowing the law, businesses need to consider their own reputations and their customer relationships when collecting, using, and protecting personal information, Serwin says. For example, how could losing users’ passwords tarnish the company’s image in the market? “Current law doesn’t specifically cover that possibility, but,” he notes, “it may be in the company’s best interest to address these types of issues.”

Mobile Apps: No Surprises, Please

From our sister blog, MoFo Tech: Widely applicable rules regarding consumer privacy disclosures in our increasingly mobile world are only now emerging. Governme

Mobile Apps: No Surprises, Please

From our sister blog, <a href="http://www.mofotechblog.com/">MoFo Tech</a>:The FCC’s revised rules for telemarketers and text marketers, which took effect on October 16, 2013, could signal a big shift in how companies direct market, posits Julie O’Neill, a Morrison & Foerster attorney specializing in privacy issues.  One section prohibits the use of an autodialer to call or text cell phones for marketing purposes, unless the caller has the called party’s signed, written consent.  “It’s almost impossible to tell which numbers on a call list are cell phones, so [almost] every list will have to be scrubbed,” she says.The new consent obligations also require new disclosures.  Because the new rules will apply retroactively, even companies with agreements in place must re-sign every customer if their agreements don’t meet the new rules’ disclosure and signature requirements.  “Companies that want to continue marketing by phone or text message are working hard to come into compliance by the rules’ mid-October effective date,” she says.Complying with these rules could prove cumbersome and costly, adds John Delaney, a partner in Morrison & Foerster’s New York office and co-editor of the Socially Aware blog.  He predicts more companies will ditch the dialup and focus on social media marketing.  “It’s a natural transition for the industry because social media is a much more engaged interaction with potential customers,” he says.

Telemarketing? Try Tweeting

From our sister blog, MoFo Tech: The FCC’s revised rules for telemarketers and text marketers, which took effect on October 16, 2013, could signal a big shift i

Telemarketing? Try Tweeting

Peer-to-peer (“P2P”) business models based on the Internet and technology platforms have become increasingly innovative.  As such models have proliferated, they frequently result in clashes with regulators or established market competitors using existing laws as a defensive tactic.  The legal battles that result illustrate the need for proactive planning and consideration of the likely legal risks during the early structuring phase of any new venture.<a href="http://en.wikipedia.org/wiki/Collaborative_consumption">Collaborative consumption</a>, or the “sharing economy” as it is also known, refers to the business model that involves individuals sharing their resources with strangers, often enabled by a third-party platform.  In recent years, there has been an explosion of these P2P businesses.  The more established businesses include online marketplaces for goods and services (<a href="http://www.ebay.com/">eBay</a>, <a href="https://www.taskrabbit.com/">Taskrabbit</a>) and platforms that provide P2P accommodation (Airbnb, <a href="http://www.onefinestay.com/">One Fine Stay</a>), social lending (<a href="http://www.zopa.com/">Zopa</a>), crowdfunding (<a href="http://www.kickstarter.com/">Kickstarter</a>) and car sharing (<a href="http://www.blablacar.com/">BlaBlaCar</a>, <a href="http://www.lyft.me/">Lyft</a>, Uber).  But these days, new sharing businesses are appearing at an unprecedented rate; you can now find a sharing platform for almost anything.  People are sharing meals, dog kennels, boats, driveways, bicycles, musical instruments – even excess capacity in their rucksacks (cyclists becoming couriers).The Internet – and, more specifically, social media platforms and mobile technology – has brought about this economic and cultural shift.  Some commentators are almost evangelical about the potential disruption to traditional economic models that the sharing economy provides, and it’s clear that collaborative consumption offers a compelling proposition for many individuals.  It helps people to make money from under-utilized assets and tap into global markets; it gives people the benefits of ownership but with reduced costs and less environmental impact; it helps to empower the under-employed; and it brings strangers together and offers potentially unique experiences.  There’s clearly both supply and demand, and a very happy set of users for a great many of these new P2P services.However, not everyone is in favor of the rapid growth of this new business model.  Naturally, most of the opposition comes from incumbent businesses or entrenched interests that are threatened by the new competition or those that have genuine concerns about the risk posed by unregulated entrants to the market.  Authorities and traditional businesses are challenging sharing economy businesses in a variety of ways, including arguing that the new businesses violate applicable laws, with accommodation providers and car-sharing companies appearing to take the brunt of the opposition to date.Bed SurfingOne of the most successful P2P marketplaces, San Francisco-founded Airbnb is a platform that enables individuals to rent out part or all of their house or apartment.  It currently operates in 192 countries and 40,000 cities.  Other accommodation-focused P2P models include <a href="http://www.onefinestay.com/">One Fine Stay</a>, a London-based platform that allows home owners to rent out empty homes while they are out of town.Companies such as these have faced opposition from hoteliers and local regulators who <a href="http://www.crainsnewyork.com/article/20130819/HOSPITALITY_TOURISM/130819909">complain</a> that home owners using these platforms have an unfair advantage by not being subject to the same laws as a traditional hotel.  City authorities have also cited zoning regulations and other rules governing short-term rentals as obstacles to this burgeoning market.  It has been reported that some residents have been served with <a href="http://ny.curbed.com/archives/2013/08/21/elizabeth_street_resident_evades_eviction_for_airbnb_activities.php">eviction notices</a> by landlords for renting out their apartments in violation of their leases, and some homeowner and neighborhood associations have adopted rules to restrict this type of short-term rental.These issues are not unique to the United States.  Commentators have reported similar resistance – with mixed responses from local or municipal governments – in cities such as Barcelona, Berlin and Montreal.It’s not particularly surprising that opposition to P2P accommodation platforms would come from existing incumbent traditional operators – after all, that’s typical of most new disruptive business models in the early stages before mainstream acceptance.  But the approaches taken by P2P opponents illustrate that most regulations were originally devised to apply to full-time commercial providers of goods and services, and apply less well to casual or occasional providers.This has consequences for regulators, who are likely to have to apply smarter regulatory techniques to affected markets.  <a href="http://www.dutchnews.nl/news/archives/2013/06/amsterdam_tones_down_oppositio.php">Amsterdam</a> is piloting such an approach to accommodation-sharing platforms, realizing the benefits that a suitably-managed approach to P2P platforms could have on tourism and the local economy.Car Sharing Companies that enable car-sharing services have also faced a barrage of opposition, both from traditional taxi companies and local authorities.  In many U.S. cities, operators such as <a href="http://www.lyft.me/">Lyft</a> and Uber have faced bans, fines and court battles.It was <a href="http://www.bizjournals.com/sanfrancisco/blog/2013/07/sfo-arrests-drivers-for-new-ride-apps.html?page=all">reported</a> in August 2013 that eleven Uber drivers and one Lyft driver were recently arrested at San Francisco airport on the basis of unlawful trespassing offenses.  In addition, during summer 2013, the Washington, D.C. Taxicab Commission proposed new restrictions that would prevent Uber and its rivals from operating there.  Further, in November 2012, the California Public Utilities Commission (“CPUC”) issued $20,000 fines against Lyft, SideCar and Uber for “operating as passenger carriers without evidence of public liability and property damage insurance coverage” and “engaging employee-drivers without evidence of workers’ compensation insurance.”All three firms appealed these fines, arguing that outdated regulations should not be applied to peer-rental services, and the CPUC allowed the companies to keep operating while it drafted new regulations, which were eventually <a href="http://techcrunch.com/2013/07/30/california-regulator-proposes-new-ride-sharing-rules-in-a-victory-for-uber-lyft-and-sidecar/">issued</a> in July 2013.  In August 2013, the Federal Trade Commission intervened and <a href="http://ftc.gov/os/2013/06/130612dctaxicab.pdf">wrote</a> to the Commissions arguing that the new rules were too restrictive and could stifle innovation.  The <a href="http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M077/K132/77132276.PDF">CPUC rules</a> (approved on September 19, 2013) require operators to be licensed and meet certain criteria including in terms of background checks, training and insurance.  The ridesharing companies will be allowed to operate legally under the jurisdiction of the CPUC, and will now fall under a newly created category called “Transportation Network Company.”Some operators have structured their businesses in an attempt to avoid at least some of the regulatory obstacles.  For example, Lyft does not set a price for a given journey; instead, riders are prompted to give drivers a voluntary “donation.”  Lyft receives an administrative fee in respect of each donation.  In addition, in its <a href="http://www.lyft.me/terms">terms</a>, Lyft states that it does not provide transportation services and is not a transportation carrier; rather, it is simply a platform that brings riders and drivers together.  In <a href="http://www.blablacar.com/">BlaBlaCar</a>’s model, drivers cannot make a profit, just offset their actual costs, which helps to ensure that drivers are not considered to be traditional taxi drivers, thereby helping them avoid the regulation that applies to the provision of taxi services.Traditional players embracing the new modelInterestingly, not all traditional players are taking a completely defensive approach.  From recent investment decisions, it appears that some companies appreciate that it could make sense for them to work closely with their upstart rivals, rather than oppose them.  For example, in 2011, GM Ventures invested $13 million in <a href="http://www.relayrides.com" target="_blank" rel="noopener">RelayRides</a> and, in January 2013, Avis acquired Zipcar, giving Avis a stake in Wheelz, a P2P car rental firm in which Zipcar has invested $14 million.The incentive for incumbent operators to embrace P2P models will likely vary by sector.  Perhaps it’s no surprise that this is best illustrated in the car rental industry, where there already exists a financial “pull” and a regulatory “push” towards greener and more sustainable models of service provision.Legal and Regulatory IssuesLawmakers and businesses around the world are currently grappling with how to interpret existing laws in the context of P2P sharing economy business models and considering whether new regulation is required.  For example, the European Union is preparing an opinion on collaborative consumption in the light of the growth of P2P businesses there.  One hopes that European policy makers focus more on incentivizing public investment in P2P projects via grants or subsidies than on prescriptive regulation of the sector.Importantly, however, it’s a particular feature of the market for P2P platforms that much of the regulatory activity tends to be at the municipal or local level, rather than national.  This tends to make for a less cohesive regulatory picture.In the meantime, anyone launching a social economy business will need to consider whether and how various thorny legal and regulatory issues will affect both the platform operator and the users of that platform.  Often, this may mean tailoring services to anticipate particular legal or regulatory concerns.<ul><li>Consumer protection.  Operators will need to consider the extent to which their platforms comply with applicable consumer protection laws, for example when drafting appropriate terms of use for the platform.</li><li>Privacy.  Operators will need to address issues of compliance with applicable privacy laws in terms of the processing of the personal data of both users and users’ customers, and prepare appropriate privacy policies and cookie notices.</li><li>Employment.  Where services are being provided, the operator will need to consider compliance with any applicable employment or recruitment laws, e.g., rules governing employment agencies, worker safety and security, and minimum wage laws.</li><li>Discrimination.  Operators will need to consider potential discrimination issues, e.g., what are the consequences if a user refuses to loan their car or provide their spare room on discriminatory grounds, for example due to a person’s race or sexuality?  Could the operator attract liability under anti-discrimination laws?</li><li>Laws relating to payments.  One key to success for a P2P business model is to implement a reliable and effective payment model.  But most countries impose restrictions on certain types of payment structures in order to protect consumers’ money.  Where payments are made via the P2P platform rather than directly between users, operators will need to address compliance with applicable payment rules, and potentially deal with local payment services laws.  Fundamentally, it needs to be clear whose obligation it is to comply with these laws.</li><li>Taxation.  Operators will need to consider taxation issues that may apply – both in terms of the operator and its users.  Some sectors of the economy – hotels, for example – are subject to special tax rates by many cities or tax authorities.  In such cases, the relevant authorities can be expected to examine closely – and potentially challenge, or assess municipal, state or local taxes against – P2P models that provide equivalent services.  In some places, collection of such taxes can be a joint and several responsibility of the platform operator and its users.</li><li>Safety and security.  When strangers are being brought together via a platform, security issues will need to be addressed.  Most social economy businesses rely on ratings and reciprocal reviews to build accountability and trust among users.  However, some platforms also mitigate risks by carrying out background and/or credit checks on users.  Airbnb also takes a practical approach, employing a full-time Trust & Safety team to provide extra assurance for its users.</li><li>Liability.  One of the key questions to be considered is who is legally liable if something goes wrong.  Could the platform attract liability if a hired car crashes or a host’s apartment is damaged?</li><li>Insurance.  Responsibility for insurance is also a key consideration.  The issue of insurance for car-sharing ventures made headlines in April 2013 when it was <a href="http://www.nytimes.com/2012/04/14/your-money/relayrides-accident-raises-questions-on-liabilities-of-car-sharing.html?pagewanted=all">reported</a> that a Boston resident had crashed a car that he had borrowed via RelayRides.  The driver was killed in the collision and four other people were seriously injured. RelayRides’ liability insurance was capped at $1 million, but the claims potentially threaten to exceed that amount.  Given these types of risks, some insurance companies are refusing to provide insurance coverage if policyholders engage in P2P sharing.  Three U.S. states (California, Oregon and Washington) have passed laws relating to car sharing, placing liability squarely on the shoulders of the car-sharing service and its insurers.</li><li>Industry-specific law and regulation.  Companies will need to consider issues of compliance with any sector-specific laws, whether existing laws or new regulations that are specifically introduced to deal with their business model (such as crowd-funding rules under the JOBS Act in the United States, and P2P lending rules to be introduced shortly in the United Kingdom).  As noted above, some social economy businesses have already experienced legal challenges from regulators, and as collaborative consumption becomes even more widely adopted, regulatory scrutiny is likely to increase.  Accordingly, rather than resist regulation, the best approach for sharing economy businesses may be to create trade associations for their sector and/or engage early on with lawmakers and regulators in order to design appropriate, smarter policies and frameworks for their industry.</li></ul>ConclusionErasmus said, “There is no joy in possession without sharing.”  Thanks to collaborative consumption, millions of strangers are now experiencing both the joy – and the financial benefits – of sharing their resources.  However, the legal challenges will need to be carefully navigated in order for the sharing economy to move from being merely disruptive to become a firmly established business model.

Autodesk

HM Revenue and Customs

Home Office, Department for Communities and Local Government, Department of Health