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Facebook faces consumer rights

A Norwegian consumer protection group that successfully took on Apple has identified its next target: Facebook.03 Dec 2009


A text transcription follows.

This transcript is for anyone with a hearing impairment or who for any other reason cannot listen to the MP3 audio file.

The following is the text spoken by OUT-LAW journalist Matthew Magee.


Hello and welcome to OUT-LAW Radio, where we hope to keep you up to date with the latest news and the most fascinating features from the world of technology law.

My name is Matthew Magee, and this week we talk to the Norwegian consumer group that took on Apple and won. Its next target? Facebook.

But first, here are some of the top stories from OUT-LAW.COM, where you can read breaking technology law news throughout the week.

High Court orders release of Wikipedia contributors details

And

New EU structure increases Brussels powers over intellectual property law

The High Court has ordered the publishers of the Wikipedia user-generated encyclopedia to reveal information which could identify a contributor in a blackmail case involving an unnamed, famous businesswoman.

The Wikimedia foundation said that it would not help to identify the user unless a court order was made, but that if an order was made it would provide the information. The businesswomen know only as G in the case claims to be the subject of a blackmail plot and the victim of the publishing in a Wikimedia entry of private and confidential information about her and her young child.

She asked the High Court to force Wikimedia to reveal the Internet Protocol (IP) address of the person who made the changes to Wikipedia, information which could help ultimately to identify that person.  The High Court made the order. 

The European Union has strengthened its powers to change intellectual property and data protection laws in the future, according to one EU law expert. The structure of the European Union changed this week when the Lisbon Treaty came into force.

The Treaty is the replacement for a rejected EU Constitution and it amends other treaties on which the EU is founded. Its governmental changes, such as the creation of an EU Council presidency and a foreign minister role for the EU Commission have proved controversial. But one EU law specialist has said that the changes could affect other areas crucial to business.

Adrian Wood of Pinsent Masons, the law firm behind OUT-LAW, said that the Lisbon Treaty provides a more secure legislative platform for the EU to legislate on areas such as energy and intellectual property, potentially widening the scope of existing forms of legislative intervention. He said "Lisbon also offers the potential for greater legislative involvement in the field of data protection, through Article 16(2) of the Treaty on the functioning of the European Union which is the new name given to the EC Treaty on which the EU trading bloc was founded.

Those were some of the top stories from this week's OUT-LAW News.


When a consumer protection organisation in a country far, far away took on the might of Apple over consumer rights in its iTunes online shop, some sniggered behind their hands. What impact could the Norwegian Consumer Council have on the mighty Steve Jobs and his all conquering iPod empire?

The sniggering died away, though, as other countries' consumer protection lobbyists joined in, as national regulators ruled iTunes' tying of its material only to iPod players illegal, and as the issues became a talking point across Europe.

And when Apple did finally abandon the Digital Rights Management System that tied iTunes material to iPods, nobody was laughing at the Norwegian Consumer Council.

Now, few would suggest that this all happened just because of the Council's actions, but Assistant Director Hans Marius Graasvold is taking some of the credit.

The Council has chosen its next target, and this time nobody doubts its seriousness. The Council now wants to take on the giants of the social networking world. It says it will launch formal complaints against Facebook, Twitter and possibly LinkedIn early next year.

Graasvold, a lawyer by trade who takes care of the Council's legal and digital departments remembers the reaction to the Apple case.

Hans Marius Graasvold: About three years ago we filed a complaint against Apple and their iTunes music store. We reacted to quite negatively to their terms of service and their use of DRM. And of course also that made some people laugh maybe in the beginning that some small consumer organisation in Norway set out to change Apples' views of DRM but what we saw was that that type of initiative where we forced the Consumer Ombudsman to react actually gained that much attention internationally and also within the European Commission that at some point Apple obviously so that they had no other choice than to start engaging in conversations and the negotiations with the Consumer movement and also the Commission and the result as most people know is that they actually ended up changing their DRM policies and also several of their terms of service.

Now it is Facebook's turn, and that of some other social networking sites. Consumers' interests are not well enough protected on such sites, says Graasvold. The problems are mostly with the terms and conditions published by those companies.

Hans Marius Graasvold: Effectively no consumers, none of these read the terms of online services but just go online and they just start using the services without actually bothering to read the terms of service. And the very few that read them don't understand them and now that, that wouldn't be such a problem if the terms of service were actually consumer friendly and in line with traditional contract law and privacy principles but what we also found out is that none of the international social networks adhere to, in the most basic contractual and privacy principles that apply in an offline environment. Where we see it is that we can't allow these social media and other types of online services set the agenda for what should be the future of online contracts and also online privacy. So we need to now step up to the tests now and do something about it now.

Graasvold says that once you get through the difficulties consumers have understanding the usage policies, there are some real underlying problems.

Hans Marius Graasvold: All these services they reserve a unilateral right to alter the terms of service at any time which is clearly in breach of traditional contract law and also what they were reserving unilateral right to terminate the contract at any time with respect to privacy this general principal internationally that all individuals shall have the right to know what kind of personal information is collected and stored about them. They also have the right to know who stores this information and where and they should have the right to be able to alter or correct wrongful information online and what we see for example a Facebook user has practically nil possibilities whatsoever to enforce these principles and these rights.

The Council and a Research Institute spent a year analysing how Norwegians actually use social networking sites and how this relates to the terms and conditions. What became very clear is that if there is a problem with social networking sites if will affect an awful lot of people. Almost everybody uses them, it found.

Hans Marius Graasvold: What we see is that practically all people aged 15 - 30, I think 96% are actually a member of at least one social network. Also we see a huge increase in respect of people age 51 and upwards, just from last year there was a 20% increase in their use of social networks.  So practically everyone are or at least will be a member of the social network.

So what will actually happen to Facebook and others if they do not respond to the Council's concerns?

Graasvold said that national regulators can levy daily fines, and that some international authorities arebeginning to show an interest in their conclusions.

Hans Marius Graasvold: If the authorities decide that Norwegian law applies they have economic sanctions first and foremost, they can actually well give them a ticket basically, also tickets on a daily basis, I mean small sums isolated but economic sanctions that over time will obviously be of some proportion. It is important as I was saying to and also obviously for the service providers to note that the European Commission is actually, they haven't quite taken actually our finding and the findings from other countries that show these things, that is about to evolve I mean this type of parallel universe with respect to contract terms and privacy.

Microblogging platform Twitter and Business networking service LinkedIn are also in the Council's sites though, Graasvold says, that they may not be able to demand action against LinkedIn because as a professionals' tool it may not count as a consumer service.

The Council also objects to Amazon's Kindle e-book reading device and the fact that it is tied to the Amazon online shop.

When it took on Apple the Council very effectively created an informal alliance with consumer groups in Denmark and Sweden, bringing international pressure to bear on the matter. Graasvold says he is seeking to do exactly the same thing this time around.

Hans Marius Graasvold: We are hoping to achieve that, but as I was saying, I mean for the consumer organisation it's quite a novel thing yet to actually be working on privacy so we have been telling them about the results of our studies and they were also quite interested in the results and obviously, I mean one of the things that we will have to do  we might just leave to make this a collective action and to engage both Norway colleagues but also our other European colleagues. We also feel that we have some sort of support within the Commission.


That's all we have time for this week, thanks for listening. Why not get in touch with OUT-LAW Radio? Do you know of a technology law story? We'd love to hear from you on radio@out-law.com. Make sure you tune in next week; for now, goodbye.