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.

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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.

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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.

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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.

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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.

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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

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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.

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In a new <a href="https://www.ftc.gov/system/files/documents/reports/big-data-tool-inclusion-or-exclusion-understanding-issues/160106big-data-rpt.pdf" target="_blank" rel="noopener">report</a>, the Federal Trade Commission (FTC) declines to call for new laws but makes clear that it will continue to use its existing tools it to aggressively police unfair, deceptive—or otherwise illegal—uses of big data. Businesses that conduct big data analytics, or that use the results of such analysis, should familiarize themselves with the report to help ensure that their practices do not raise issues.The report, titled “Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues” grew out of a 2014 FTC workshop that brought together stakeholders to discuss big data’s potential to both create opportunities for consumers and discriminate against them. The Report aims to educate businesses on key laws, and also outlines concrete steps that businesses can take to maximize the benefits of big data while avoiding potentially exclusionary or discriminatory outcomes.<h3>What Is “Big Data”?</h3>The Report explains that “big data” arises from a confluence of factors, including the nearly ubiquitous collection of consumer data from a variety of sources, the plummeting cost of data storage, and powerful new capabilities of drawing connections and making inferences and predictions from collected data. The Report describes the life cycle of big data as involving four phases:<ul><li>Collection: Little bits of data are collected about individual consumers from a variety of sources, such as online shopping, cross-device tracking, online cookies or the Internet of Things (i.e., connected products or services).</li><li>Compilation and Consolidation: The “little” data is compiled and consolidated into “big” data, often by data brokers who build profiles about individual consumers.</li><li>Data Mining and Analytics: The “big” data is analyzed to uncover patterns of past consumer behavior or predict future consumer behavior.</li><li>Use: Once analyzed, big data is used by companies to enhance the development of new products, individualize their marketing, and target potential consumers.</li></ul>The Report focuses on the final phase of the life cycle: the use of big data. It explores how consumers may be both helped and harmed by companies’ use of big data.<h3>Benefits and Risks of Big Data</h3>The Report emphasizes that, from a policy perspective, big data can provide significant opportunities for social improvements: big data can help target educational, credit, health care, and employment opportunities to low-income and underserved communities.  For instance, the Report notes that big data is already being used to benefit underserved communities, such as by providing access to credit using nontraditional methods to establish creditworthiness, tailoring health care to individual patients’ characteristics, and increasing equal access to employment to hire more diverse workforces.On the flipside, however, a powerful tool for social good can also be used to discriminate. Just as big data can enhance inclusion, it can also create exclusion. The Report raises concerns that big data analytics may be inadvertently used to exclude certain populations, due to incomplete or inaccurate data, or hidden biases in the collection, analysis, and interpretation of the data. Data may well show correlations that are completely spurious, and if companies base marketing choices on such correlations, unintended harm to consumers may result. The Report provides the example of a credit card company lowering a customer’s credit limit based not on that customer’s payment history, but rather on the fact that the customer shopped at establishments where individuals with poor credit histories had also shopped. In addition, the Report expresses concern that the use of big data may assist in the targeting of vulnerable consumers for fraud, result in higher-priced goods and services for lower-income communities, and exclude such communities from certain offerings.<h3>Maximizing Benefits While Minimizing Risks</h3>Despite recognizing the potential pitfalls of big data, the Report in no way discourages companies from using it. Rather, it seeks to help companies navigate the challenge of how to use big data in a way that maximizes the benefits to them and to society as a whole, while minimizing legal and ethical risks.<ol><li> Compliance with Potentially Applicable Laws</li></ol>Companies should understand the laws that may apply to big data practices: specifically, the Fair Credit Reporting Act (FCRA); federal equal opportunity laws, including the Equal Credit Opportunity Act (ECOA) and equal employment opportunity laws (Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Fair Housing Act, and the Genetic Information Nondiscrimination Ac); and Section 5 of the FTC Act.<ul><li>The FCRA imposes obligations on companies that compile, sell, or use consumer reports. Recent FTC enforcement actions, including <a href="http://www.sociallyawareblog.com/2012/08/10/the-ftcs-spokeo-settlement-highlights-social-media-related-legal-risks/" target="_blank" rel="noopener">United States v. Spokeo, Inc.</a>, and <a href="https://www.ftc.gov/news-events/press-releases/2014/04/two-data-brokers-settle-ftc-charges-they-sold-consumer-data" target="_blank" rel="noopener">United States v. Instant Checkmate, Inc.</a>, demonstrate that the FCRA extends beyond traditional credit bureaus to data brokers that compile nontraditional information, including social media information, if that information is used for consumer eligibility decisions. If a company uses big data products to make eligibility decisions (such as to determine a consumer’s eligibility for credit, employment, insurance, or housing), it should make sure that it has complied with all applicable FCRA requirements, including certifying that it has a permissible purpose for obtaining the information and that it will not use the information to violate equal opportunity laws. Similarly, the company must provide consumers with any notices required under the FCRA (such as notice of adverse action taken based on information in a consumer report) and obtain any required authorizations (such as to procure a consumer report for employment purposes).</li><li>Federal equal opportunity laws prohibit discrimination based on protected characteristics such as race, color, sex, religion, age, disability, national origin, marital status, and genetic information. Discrimination may take the form of disparate treatment (intentionally treating an individual differently based on a protected characteristic) or disparate impact (applying a facially neutral policy that has a disproportionate adverse effect on individuals with a protected characteristic). The Report suggests, for example, that it may be problematic under the ECOA for a company to make credit decisions based on consumers’ zip codes, if the decisions have a disproportionate adverse impact on a particular ethnic group and are not justified by a legitimate business necessity. Companies should thus examine whether their use of big data results in the treatment of people differently on a prohibited basis, whether directly or indirectly, and take steps to remedy any such discrepancies.</li><li>Section 5 of the FTC Act prohibits unfair or deceptive acts or practices. Companies engaging in big data analytics should consider whether they are violating any material promises to consumers, such as a promise to refrain from sharing consumer data or an assurance that they will safeguard it. Further, companies that supply big data to other companies should undertake reasonable measures to know the purposes for which their customers will use the data. For example, companies should take steps to ensure that their customers will not use big data to commit fraud or for discriminatory purposes.</li></ul>The Report urges companies to proceed with caution when using big data in ways that could lead them to violate these and other potentially applicable laws.<ol start="2"><li>Policy Considerations for Big Data Research</li></ol>The Report urges companies to take into account the special policy considerations raised by big data research. To help minimize the potential for discriminatory harm arising out of such research, the Report encourages companies to address the following questions:<ul><li>How representative are your data sets? Consider whether they are missing information from particular populations and, if so, take steps to address issues of under- and overrepresentation.</li><li>Does your data model account for biases? Review your data sets and algorithms to ensure that hidden biases do not have an unintended impact on certain populations.</li><li>How accurate are your predictions based on big data? Remember that just because your big data analytics found a correlation, the correlation is not necessarily meaningful. Human oversight of big data tools may be worthwhile, particularly when decisions implicating health care, credit, or employment are involved.</li><li>Does your reliance on big data raise ethical or fairness concerns? Consider whether such concerns advise against using big data in certain circumstances. Consider further whether you can use big data to advance opportunities for underserved populations.</li></ul><h3>Conclusion</h3>Particularly in light of ever-developing technologies, big data will certainly continue to grow in importance. The Report makes clear that the FTC will continue to monitor companies’ legal obligations around its use. Accordingly, companies should carefully examine their big data practices to identify and take steps to help minimize the risks they may present.

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Mary Race assists clients with a wide range of challenging privacy compliance and data security matters. Her practice focuses on managing privacy risks and helping clients develop and implement comprehensive privacy programs across a variety of industries, including tech, retail, manufacturing, advertising, social media, and communications.

Mary Race

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Julie O'Neill

Big Data, Big Challenges: FTC Report Warns of Potential Discriminatory Effects of Big Data