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.

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In a major development for cloud and other data storage providers, and further complicating the legal landscape for the cross-border handling of data, a Federal Magistrate Judge in the Eastern District of Pennsylvania ruled for the Department of Justice and ordered Google, Inc., to comply with two search warrants for foreign-stored user data. The order was issued on February 3, 2017 pursuant to the <a href="https://www.law.cornell.edu/uscode/text/18/part-I/chapter-121" target="_blank" rel="noopener">Stored Communications Act</a>, (SCA), and the reasoning of the Court rested heavily on the court’s statutory analysis of the SCA. The ruling is a <a href="http://www.sociallyawareblog.com/2016/10/25/email-outside-us/" target="_blank" rel="noopener">marked departure</a> from a recent, high-profile <a href="https://www.ediscoverylaw.com/wp-content/uploads/2016/07/In-re-Matter-of-a-Warrant.pdf" target="_blank" rel="noopener">Second Circuit decision</a> holding that Microsoft could refuse to comply with a similar court order for user data stored overseas.The SCA regulates how service providers like Google and Microsoft who store user data can disclose user information. The Magistrate Judge issued two warrants under the SCA for emails sent from Google users in the United States to recipients in the United States. Google refused to fully comply, invoking Microsoft, and the Government moved to compel. In its briefing, Google argued that the SCA can only reach data stored in the United States and that, because Google constantly shuffles “shards” of incomplete user data between its servers across the world, Google could never know for certain what information is stored domestically and what is stored overseas. Therefore, Google argued, the data sought under the warrants was beyond the reach of the SCA.The Court ordered Google to comply with the warrants. Citing <a href="https://www.ediscoverylaw.com/wp-content/uploads/2016/07/In-re-Matter-of-a-Warrant.pdf" target="_blank" rel="noopener">Microsoft</a>, the Court began by noting that the focus of the SCA was to preserve the privacy of individuals’ communications, and that the SCA—and any warrant issued pursuant to it—applies only within the United States. The key inquiry, the Court reasoned, is where the “relevant conduct” affecting privacy takes place. On this, the Court “respectfully disagree[d]” with the Second Circuit’s reasoning. In Microsoft, the seizure of data in Ireland was deemed the relevant conduct. But as for Google, the Court found, the relevant conduct was “the actual invasion of the account holders’ privacy—the searches—[that] will occur in the United States.” Transferring the data to the U.S. would not constitute an illegal seizure under the Fourth Amendment, the Court reasoned, because “there is no meaningful interference with the account holder’s possessory interest in the user data.” That leaves only “a permissible domestic application of the SCA, even if other conduct (the electronic transfer of data) occurs abroad.”The Court was critical of two aspects of Google’s position in particular. First, if the certain location of user information was never known, then Google could not specify which foreign sovereignty would be violated by accessing the data. Second, access to a user’s data when it is segmented and constantly crossing borders would be impossible under a Mutual Legal Assistance Treaty, the potential availability of which played key a role in the Microsoft ruling.The decision demonstrates that the Department of Justice is continuing to press arguments that did not win over the Second Circuit in the Microsoft case, and underscores that the Second Circuit’s approach may not hold sway elsewhere as other U.S. courts apply the SCA to companies’ increasingly complex data-handling practices. The decision further muddles the status of cross-border data transfers, as U.S.-based cloud services providers may have a more difficult time representing whether data based in the European Union is exposed to U.S. government access. In addition to compounding the uncertainty of the legal landscape in this area, it increases the possibility that these issues may one day be headed to the U.S. Supreme Court.*  *  *For other Socially Aware posts addressing user data and the Stored Communications Act, please see the following: <a href="http://www.sociallyawareblog.com/2016/10/25/email-outside-us/" target="_blank" rel="noopener">Second Circuit: Email Stored Outside the U.S. Might Be Beyond Government’s Reach</a>; and <a href="http://www.sociallyawareblog.com/2012/07/23/weve-come-for-your-tweets-twitter-to-appeal-denial-of-its-motion-to-quash-district-attorneys-subpoena/" target="_blank" rel="noopener">We’ve Come for Your Tweets: Twitter to Appeal Denial of Its Motion To Quash District Attorney’s Subpoena</a>.

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Google Ordered to Comply with Warrant for Foreign-Stored User Data

Google Ordered to Comply with Warrant for Foreign-Stored User Data

In a major development for cloud and other data storage providers, and further complicating the legal landscape for the cross-border handling of data, a Federal

Can the mere offering of a mobile app subject the provider of such app to the privacy laws of countries in the European Union (EU)—even if the provider does not have any establishments or presence in the EU? The answer from the District Court of The Hague to that question is yes. The court confirmed on November 22, 2016, that app providers are subject to the Dutch Privacy Act by virtue of the mere offering of an app that is available on phones of users in the Netherland, even if they don’t have an establishment or employees there.Context. EU privacy laws generally apply on the basis of two triggers: (i) if a company has a physical presence in the EU (in the form of an establishment or office or otherwise) and that physical presence is involved in the collection or other handling of personal information; or (ii) if a company doesn’t have a physical presence but makes use of equipment and means located in the EU to handle personal information.Background. In 2013, the Dutch Data Protection Authority (DPA) completed an investigation into WhatsApp’s practice of asking users, including in the Netherlands, to give access to their electronic address book to WhatsApp and enable it to record phone numbers, including those of non-WhatsApp users on its U.S. servers. Further to the investigation, the DPA ordered that the company appoint a representative in the Netherlands accountable for compliance with the Dutch Privacy Act under Article 4 of the Act (i.e., where a company who processes personal information of users does not have an establishment in the Netherlands, but uses equipment there).Key findings. The court decided that, simply by making an app available in the Netherlands, the company made “use of equipment” (i.e., smartphones on which the app is installed) in the Netherlands, even though the equipment is not the company’s own or specifically procured equipment. The court also found that such equipment was used for processing personal information (e.g., accessing users’ address books and transferring certain information to the United States). As a result, this triggered the application of EU privacy rules, as implemented in the Netherlands, through the Dutch Privacy Act.The court also refuted the company’s argument that a representative must only be appointed in the EU in the context of information and reporting duties to the DPA and not substantive compliance with the Dutch Privacy Act. To the contrary, the court found that this representative had to comply with the full breadth of the Dutch Privacy Act.To support its view, the court referred to works (on <a href="http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiVquvkzo_SAhUOsBQKHaS7DCkQFgghMAA&url=http%3A%2F%2Fec.europa.eu%2Fjustice%2Fpolicies%2Fprivacy%2Fdocs%2Fwpdocs%2F2010%2Fwp179_en.pdf&usg=AFQjCNFtsIb2Aj1CJJY9hOebpDUCV83nCw&bvm=bv.147134024,d.d24" target="_blank" rel="noopener">applicable law</a> and <a href="http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwj-6vfvzo_SAhXIWxQKHZH4ApEQFgghMAA&url=http%3A%2F%2Fec.europa.eu%2Fjustice%2Fdata-protection%2Farticle-29%2Fdocumentation%2Fopinion-recommendation%2Ffiles%2F2013%2Fwp202_en.pdf&usg=AFQjCNGBbQiPnrfgq9n66jJtU0Cz_cHJvQ&bvm=bv.147134024,d.d24" target="_blank" rel="noopener">apps on smart devices</a>) of the Article 29 Working Party (WP29, a consortium of EU Member State DPAs) and to the European Court of Justice’s interpretation of the scope of EU privacy rules in the Google v. Spain case (i.e., Google’s search engine is subject to EU privacy rules even though the search engine is administered out of the U.S., <a href="http://curia.europa.eu/juris/document/document.jsf;jsessionid=9ea7d0f130d6db167dea74d54003874b8cf3a40ad633.e34KaxiLc3eQc40LaxqMbN4PahmLe0?text=&docid=152065&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=533883" target="_blank" rel="noopener">C-131/12</a>).It is interesting to note that the court relies on the WP29 in reaching its decision. Although the court refers to the WP29’s work as “advice,” thereby acknowledging that it is not binding, the court nevertheless cites to such advice in support of its own findings and ruling.Conclusion. App developers will want to take note of the District Court of The Hague’s WhatsApp decision, given that it appears to significantly broaden the reach of EU privacy rules.Apps are almost always provided on a global basis. Under the WhatsApp decision, the mere fact that an app developer has customers in the EU, and has access (even at a distance) to such user’s personal information, may mean that it needs to comply with EU privacy rules, including appointing a representative in the EU. An app developer seeking to avoid this obligation may need to either geo-restrict the availability of its app (e.g., restrictions in app stores) or refrain from collecting users’ information (e.g., this could work for purely informative apps).Finally, although this “use of equipment” criteria will disappear under the new EU privacy regime (the General Data Protection Regulation, effective as of May 25, 2018), it will be replaced by new criteria for applicability, including the offering of products or services to EU residents. It may well be likely (although this was not before the court in the WhatsApp case) that a court will reach a similar conclusion also under that new EU privacy regime.The District Court of The Hague’s decision is available <a href="https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2016:14088" target="_blank" rel="noopener">here</a>.*      *      *For more information on mobile apps in Europe, please see the following Socially Aware blog posts: <a href="http://www.sociallyawareblog.com/2016/01/27/launching-a-mobile-app-in-europe-mobile-app-legal-terms-conditions-seven-key-considerations/" target="_blank" rel="noopener">Launching a Mobile App in Europe? Seven Things to Consider When Drafting the Terms & Conditions</a>; <a href="http://www.sociallyawareblog.com/2013/04/16/european-privacy-regulator-issues-important-opinion-on-the-use-of-apps/" target="_blank" rel="noopener">European Privacy Regulator Issues Important Opinion on the Use of Apps</a>.

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Managing Partner, Amsterdam and Brussels

Alex van der Wolk, co-chair of Morrison Foerster’s preeminent Global Privacy & Data Security practice and managing partner of the firm’s Amsterdam and Brussels offices, employs his nearly 20 years of experience to advise global companies on their most complex data strategies and compliance programs governing all aspects of information management. 

Alex van der Wolk

The Hague District Court’s WhatsApp Decision Creates Concerns for Mobile App Developers