Dissecting the Facebook 'Terms of Use'
Earlier in the seminar, I'd voiced my objection to the possibility that students might be compelled to become members of some of these 'Web 2.0' services to do mandatory assessment items in some subjects. This would, of course, require those students to enter into a contractual relationship with those service providers, with associated legal liability and privacy risks. It might also constitute third line forcing, which is per-se illegal in Australia, but that's a different issue.
The concerns I raised were largely dismissed as paranoia. So, I got to thinking, exactly what is in the applicable contracts for a service like Facebook? In this posting, I dissect the Facebook 'Terms of Use'... You know, that massively long (over 6000 words), complicated, contractual document that nobody ever reads when they sign up.
Welcome to Facebook, a social utility that connects you with the people around you. The Facebook service and network (collectively, "Facebook" or "the Service") are operated by Facebook, Inc. and its corporate affiliates (collectively, "us", "we" or "the Company"). By accessing or using our web site at www.facebook.com or the mobile version thereof (together the "Site") or by posting a Share Button on your site, you (the "User") signify that you have read, understand and agree to be bound by these Terms of Use ("Terms of Use" or "Agreement"), whether or not you are a registered member of Facebook.
Fairly typical for a 'browsewrap' licence. If you use the website, you are purportedly bound by this contract, whether or not they have brought its existence to your attention, whether or not you have actually seen it, and whether or not you have manifested your assent to its terms. These types of 'browsewrap' agreements can be characterised as exercises in wishful thinking. Companies who use them and expect them to be binding should be savagely beaten with a contract law textbook, until such time as they get the concept of 'offer and acceptance' and how it is not displaced by 'our website, our rules'.
We reserve the right, at our sole discretion, to change, modify, add, or delete portions of these Terms of Use at any time without further notice. If we do this, we will post the changes to these Terms of Use on this page and will indicate at the top of this page the date these terms were last revised. Your continued use of the Service or the Site after any such changes constitutes your acceptance of the new Terms of Use. If you do not agree to abide by these or any future Terms of Use, do not use or access (or continue to use or access) the Service or the Site. It is your responsibility to regularly check the Site to determine if there have been changes to these Terms of Use and to review such changes.
The 9th Circuit Court of Appeals in the US has held that companies cannot unilaterally vary the terms of a contract such as this one by merely updating their website, and that actual notice is required to users. I guess that Facebook and/or their lawyers either didn't hear about that case, or they're choosing to ignore it and hope that courts outside the 9th Circuit do likewise.
These types of terms are fundamentally dangerous -- even if you take the time to read and understand the contract, so you can give informed consent to its terms, Facebook can change the contract at any time, and say that you are bound to the amended contract. The deal you agree to today isn't necessarily the deal that you'll be stuck with tomorrow.As a matter of contract law, a contract which leaves essential matters for later determination by one of the contracting parties is incomplete and unenforceable. A contract which purports to give Facebook the discretion to unilaterally alter the terms of the contract would likely be unenforceable for the same reason.
These types of provisions are further discussed in my journal article on unfair terms in electronic contracts.
PLEASE READ THESE TERMS OF USE CAREFULLY AS THEY CONTAIN IMPORTANT INFORMATION REGARDING YOUR LEGAL RIGHTS, REMEDIES AND OBLIGATIONS. THESE INCLUDE VARIOUS LIMITATIONS AND EXCLUSIONS, AND A DISPUTE RESOLUTION CLAUSE THAT GOVERNS HOW DISPUTES WILL BE RESOLVED.
More wishful thinking. I'd bet good money that if they looked in their server logs to determine the number of people who tick the 'I have read and agree...' box and sign up, without having actually clicked through to the terms of use, it would be > 99% of their member base. Nobody reads these things. Except paranoid legal researchers such as myself.
Eligibility
Membership in the Service is void where prohibited. This Site is intended solely for users who are thirteen (13) years of age or older, and users of the Site under 18 who are currently in high school or college. Any registration by, use of or access to the Site by anyone under 13, or by anyone who is under 18 and not in high school or college, is unauthorized, unlicensed and in violation of these Terms of Use. By using the Service or the Site, you represent and warrant that you are 13 or older and in high school or college, or else that you are 18 or older, and that you agree to and to abide by all of the terms and conditions of this Agreement.
I'm not exactly sure why they're discriminating against high school dropouts, but it's their site...
Registration Data; Account Security
In consideration of your use of the Site, you agree to (a) provide accurate, current and complete information about you as may be prompted by any registration forms on the Site ("Registration Data"); (b) maintain the security of your password and identification; (c) maintain and promptly update the Registration Data, and any other information you provide to Company, to keep it accurate, current and complete; and (d) be fully responsible for all use of your account and for any actions that take place using your account.
You must give them whatever complete and accurate demographic data they want, so they can deliver targeted advertising to you. No more saying that you're a 60+ phrenologist who lives in Nicaragua with an annual income of > $150k.
Proprietary Rights in Site Content; Limited License
All content on the Site and available through the Service, including but not limited to designs, text, graphics, pictures, video, information, applications, software, music, sound and other files, and their selection and arrangement (the "Site Content"), are the proprietary property of the Company, its users or its licensors with all rights reserved. No Site Content may be modified, copied, distributed, framed, reproduced, republished, downloaded, displayed, posted, transmitted, or sold in any form or by any means, in whole or in part, without the Company's prior written permission, except that the foregoing does not apply to your own User Content (as defined below) that you legally post on the Site. Provided that you are eligible for use of the Site, you are granted a limited license to access and use the Site and the Site Content and to download or print a copy of any portion of the Site Content to which you have properly gained access solely for your personal, non-commercial use, provided that you keep all copyright or other proprietary notices intact. Except for your own User Content, you may not upload or republish Site Content on any Internet, Intranet or Extranet site or incorporate the information in any other database or compilation, and any other use of the Site Content is strictly prohibited. Such license is subject to these Terms of Use and does not include use of any data mining, robots or similar data gathering or extraction methods. Any use of the Site or the Site Content other than as specifically authorized herein, without the prior written permission of Company, is strictly prohibited and will terminate the license granted herein. Such unauthorized use may also violate applicable laws including without limitation copyright and trademark laws and applicable communications regulations and statutes. Unless explicitly stated herein, nothing in these Terms of Use shall be construed as conferring any license to intellectual property rights, whether by estoppel, implication or otherwise. This license is revocable at any time without notice and with or without cause.
Copyright and contract rears its ugly head again. Not only does this clause (as I read it) purport to exclude the user's ability to engage in fair dealing (or fair use, or any other exception to copyright), if you do so, whatever limited licence they have granted you to use the content of the site will terminate. This might be enforcable in the US, where it has been held that you can contract out of at least some of your fair use rights (specifically, reverse engineering). In Australia, a grey area.
Trademarks
32665, FACEBOOK, THE FACEBOOK, FACEBOOKHIGH, FBOOK, POKE, THE WALL and other Company graphics, logos, designs, page headers, button icons, scripts and service names are registered trademarks, trademarks or trade dress of Company in the U.S. and/or other countries. Company's trademarks and trade dress may not be used, including as part of trademarks and/or as part of domain names, in connection with any product or service in any manner that is likely to cause confusion and may not be copied, imitated, or used, in whole or in part, without the prior written permission of the Company.
So don't you dare register facebooksucks.com. Or even say that Facebook sucks. Criticism is trademark infringement, don't you know?
User Conduct
You understand that except for advertising programs offered by us on the Site (e.g., Facebook Flyers, Facebook Marketplace), the Service and the Site are available for your personal, non-commercial use only. You represent, warrant and agree that no materials of any kind submitted through your account or otherwise posted, transmitted, or shared by you on or through the Service will violate or infringe upon the rights of any third party, including copyright, trademark, privacy, publicity or other personal or proprietary rights; or contain libelous, defamatory or otherwise unlawful material.
I wonder whether the teaching activities of a tertiary educational institution such as QUT would fall within 'personal, non-commercial use'.. doubt it.
In addition, you agree not to use the Service or the Site to:
- harvest or collect email addresses or other contact information of other users from the Service or the Site by electronic or other means for the purposes of sending unsolicited emails or other unsolicited communications;
- use the Service or the Site in any unlawful manner or in any other manner that could damage, disable, overburden or impair the Site;
- use automated scripts to collect information from or otherwise interact with the Service or the Site;
All the above paragraph is missing is an 'in our absolute discretion'. It seems to give them a very broad discretion over what type of material you can put on Facebook, and also presumably the power to decide you have breached the Terms of Use because they have, after the fact, deemed material you posted to be objectionable.
- upload, post, transmit, share, store or otherwise make available any content that we deem to be harmful, threatening, unlawful, defamatory, infringing, abusive, inflammatory, harassing, vulgar, obscene, fraudulent, invasive of privacy or publicity rights, hateful, or racially, ethnically or otherwise objectionable;
Objectionable to who? Is a cartoon of the prophet Mohammed 'racially, ethnically or otherwise objectionable'? Is a posting alleging that the September 11 attacks were a CIA conspiracy, or that the current US occupation of Iraq was for the purpose of looting the country's oil 'inflammatory' or 'otherwise objectionable'? Is a posting saying 'George W Bush can kiss my arse' vulgar?
Exactly what constitutes falsely stating or misrepresenting yourself? Does this exclude use of a pseudonym? Ladies, no more being 29 for three years in a row. Facebook commands you.
- upload, post, transmit, share, store or otherwise make available any videos other than those of a personal nature that: (i) are of you or your friends, (ii) are taken by you or your friends, or (iii) are original art or animation created by you or your friends;
- register for more than one User account, register for a User account on behalf of an individual other than yourself, or register for a User account on behalf of any group or entity;
- impersonate any person or entity, or falsely state or otherwise misrepresent yourself, your age or your affiliation with any person or entity;
- upload, post, transmit, share or otherwise make available any unsolicited or unauthorized advertising, solicitations, promotional materials, "junk mail," "spam," "chain letters," "pyramid schemes," or any other form of solicitation;
- upload, post, transmit, share, store or otherwise make publicly available on the Site any private information of any third party, including, without limitation, addresses, phone numbers, email addresses, Social Security numbers and credit card numbers;
- solicit personal information from anyone under 18 or solicit passwords or personally identifying information for commercial or unlawful purposes;
- upload, post, transmit, share or otherwise make available any material that contains software viruses or any other computer code, files or programs designed to interrupt, destroy or limit the functionality of any computer software or hardware or telecommunications equipment;
- intimidate or harass another;
- upload, post, transmit, share, store or otherwise make available content that would constitute, encourage or provide instructions for a criminal offense, violate the rights of any party, or that would otherwise create liability or violate any local, state, national or international law;
- use or attempt to use another's account, service or system without authorization from the Company, or create a false identity on the Service or the Site.
- upload, post, transmit, share, store or otherwise make available content that, in the sole judgment of Company, is objectionable or which restricts or inhibits any other person from using or enjoying the Site, or which may expose Company or its users to any harm or liability of any type.
Without limiting any of the foregoing, you also agree to abide by our Facebook Code of Conduct that provides further information regarding the authorized conduct of users on Facebook.
Incorporation by reference, another common feature of electronic contracts. I won't dissect the Code of Conduct, its largely duplicative of the Terms of Use, and also contains a 'this Content Code of Conduct is subject to change at any time at Facebook's sole
discretion' provision.
User Content Posted on the Site
You are solely responsible for the photos, profiles, messages, notes, text, information, music, video, advertisements, listings, and other content that you upload, publish or display (hereinafter, "post") on or through the Service or the Site, or transmit to or share with other users (collectively the "User Content"). You may not post, transmit, or share User Content on the Site or Service that you did not create or that you do not have permission to post. You understand and agree that the Company may, but is not obligated to, review the Site and may delete or remove (without notice) any Site Content or User Content in its sole discretion, for any reason or no reason, including without limitation User Content that in the sole judgment of the Company violates this Agreement or the Facebook Code of Conduct, or which might be offensive, illegal, or that might violate the rights, harm, or threaten the safety of users or others. You are solely responsible at your sole cost and expense for creating backup copies and replacing any User Content you post or store on the Site or provide to the Company.
When you post User Content to the Site, you authorize and direct us to make such copies thereof as we deem necessary in order to facilitate the posting and storage of the User Content on the Site. By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing. You may remove your User Content from the Site at any time. If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content.
The licence granted above seems overly broad to me. It's also not clear to me how removing content from the site can cause an 'irrevocable, perpetual' licence to 'automatically expire'. The wording of this paragraph seems to contradict itself.
I'm now going to start omitting relatively non-controversial chunks of text from the ToU, because it's a massive document...
[stuff omitted]
Third Party Websites and Content
The Site contains (or you may be sent through the Site or the Service) links to other web sites ("Third Party Sites") as well as articles, photographs, text, graphics, pictures, designs, music, sound, video, information, applications, software and other content or items belonging to or originating from third parties (the "Third Party Applications, Software or Content"). Such Third Party Sites and Third Party Applications, Software or Content are not investigated, monitored or checked for accuracy, appropriateness, or completeness by us, and we are not responsible for any Third Party Sites accessed through the Site or any Third Party Applications, Software or Content posted on, available through or installed from the Site, including without limitation the content, accuracy, offensiveness, opinions, reliability, privacy practices or other policies of or contained in the Third Party Sites or the Third Party Applications, Software or Content. Inclusion of, linking to or permitting the use or installation of any Third Party Site or any Third Party Applications, Software or Content does not imply approval or endorsement thereof by us. If you decide to leave the Site and access the Third Party Sites or to use or install any Third Party Applications, Software or Content, you do so at your own risk and you should be aware that our terms and policies no longer govern. You should review the applicable terms and policies, including privacy and data gathering practices, of any site to which you navigate from the Site or relating to any applications you use or install from the site.
"We can send you links to malicious software or scams, and it's not our fault." That didn't work too well for Channel 7 recently.
[stuff omitted]
Terms of Sale
Please refer to our Terms of Sale for the terms, conditions and policies applicable to your purchase of products or services from Company. By ordering products or services from Company through the Site, you agree to be bound by and accept the Terms of Sale. The Terms of Sale are subject to change without prior notice at any time, in Company's sole discretion so you should review the Terms of Sale each time you make a purchase.
The Terms of Sale make for interesting reading. Suffice to say that they purport to disclaim warranties that would be implied into consumer transactions by the Trade Practices Act, and arguably contravenes ss 52 and 53(g) of the TPA. Also contains a mandatory arbitration clause, an issue which I'll discuss later.
User Disputes
You are solely responsible for your interactions with other Facebook users. We reserve the right, but have no obligation, to monitor disputes between you and other users.
Privacy
We care about the privacy of our users. Click here to view the Facebook's Privacy Policy. By using the Site or the Service, you are consenting to have your personal data transferred to and processed in the United States.
... and used for targetted advertising, and shared with third parties that Facebook has a business relationship with...
Disclaimers
The Company is not responsible or liable in any manner for any User Content or Third Party Applications, Software or Content posted on the Site or in connection with the Service, whether posted or caused by users of the Site, by Facebook, by third parties or by any of the equipment or programming associated with or utilized in the Site or the Service. Although we provide rules for user conduct and postings, we do not control and are not responsible for what users post, transmit or share on the Site and are not responsible for any offensive, inappropriate, obscene, unlawful or otherwise objectionable content you may encounter on the Site or in connection with any User Content or Third Party Applications, Software or Content. The Company is not responsible for the conduct, whether online or offline, of any user of the Site or Service.
The Site and the Service may be temporarily unavailable from time to time for maintenance or other reasons. Company assumes no responsibility for any error, omission, interruption, deletion, defect, delay in operation or transmission, communications line failure, theft or destruction or unauthorized access to, or alteration of, User communications. The Company is not responsible for any technical malfunction or other problems of any telephone network or service, computer systems, servers or providers, computer or mobile phone equipment, software, failure of email or players on account of technical problems or traffic congestion on the Internet or at any Site or combination thereof, including injury or damage to User's or to any other person's computer, mobile phone, or other hardware or software, related to or resulting from using or downloading materials in connection with the Web and/or in connection with the Service, including without limitation any Mobile Client software. Under no circumstances will the Company be responsible for any loss or damage, including any loss or damage to any User Content or personal injury or death, resulting from anyone's use of the Site or the Service, any User Content or Third Party Applications, Software or Content posted on or through the Site or the Service or transmitted to Users, or any interactions between users of the Site, whether online or offline.
THE SITE, THE SERVICE (INCLUDING THE MOBILE SERVICES, THE SHARE SERVICE AND THE MARKETPLACE SERVICE), ANY PLATFORM APPLICATIONS AND THE SITE CONTENT ARE PROVIDED "AS-IS" AND THE COMPANY DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. THE COMPANY CANNOT GUARANTEE AND DOES NOT PROMISE ANY SPECIFIC RESULTS FROM USE OF THE SITE AND/OR THE SERVICE AND/OR ANY PLATFORM APPLICATIONS. COMPANY DOES NOT REPRESENT OR WARRANT THAT SOFTWARE, CONTENT OR MATERIALS ON THE SITE, THE SERVICE OR ANY PLATFORM APPLICATIONS ARE ACCURATE, COMPLETE, RELIABLE, CURRENT OR ERROR-FREE OR THAT THE SITE OR SERVICE ITS SERVERS, OR ANY PLATFORM APPLICATIONS ARE FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS. THEREFORE, YOU SHOULD EXERCISE CAUTION IN THE USE AND DOWNLOADING OF ANY SUCH SOFTWARE, CONTENT OR MATERIALS AND USE INDUSTRY-RECOGNIZED SOFTWARE TO DETECT AND DISINFECT VIRUSES. WITHOUT LIMITING THE FOREGOING, YOU UNDERSTAND AND AGREE THAT YOU DOWNLOAD OR OTHERWISE OBTAIN CONTENT, MATERIAL, DATA OR SOFTWARE (INCLUDING ANY MOBILE CLIENT) FROM OR THROUGH THE SERVICE AND ANY PLATFORM APPLICATIONS AT YOUR OWN DISCRETION AND RISK AND THAT YOU WILL BE SOLELY RESPONSIBLE FOR YOUR USE THEREOF AND ANY DAMAGES TO YOUR MOBILE DEVICE OR COMPUTER SYSTEM, LOSS OF DATA OR OTHER HARM OF ANY KIND THAT MAY RESULT.
Ahh, the obligatory BIG SCARY DISCLAIMER WRITTEN ALL IN CAPITAL LETTERS. Every good electronic contract has one. As is fairly common with electronic contracts used by US companies, it purports to exclude non-excludable warranties which the Trade Practices Act implies into consumer contracts.
The also-obligatory BIG SCARY LIMITATION CLAUSE. Unless you know that the TPA implies certain non-excludible, non-limitable warranties into consumer contracts -- and I'd bet good money that > 99% of Australian facebook users don't know that -- it's impossible to accurately understand how these kinds of disclaimer and limitation clauses affect your legal rights. The above arguably contravenes ss 52 and 53(g) of the TPA. Whether they do, in fact, contravene those sections would depend on the construction of the agreement and the effect of the last paragraph (i.e. 'CERTAIN STATE LAWS...') on the previous, unqualified, disclaimer and limitation clauses.The Company reserves the right to change any and all content, software and other items used or contained in the Site and any Services and Platform Applications offered through the Site at any time without notice. Reference to any products, services, processes or other information, by trade name, trademark, manufacturer, supplier or otherwise does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by Company.
Limitation on Liability
IN NO EVENT WILL COMPANY OR ITS DIRECTORS, EMPLOYEES OR AGENTS BE LIABLE TO YOU OR ANY THIRD PERSON FOR ANY INDIRECT, CONSEQUENTIAL, EXEMPLARY, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES, INCLUDING FOR ANY LOST PROFITS OR LOST DATA ARISING FROM YOUR USE OF THE SITE OR THE SERVICE, ANY PLATFORM APPLICATIONS OR ANY OF THE SITE CONTENT OR OTHER MATERIALS ON, ACCESSED THROUGH OR DOWNLOADED FROM THE SITE, EVEN IF THE COMPANY IS AWARE OR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE COMPANY'S LIABILITY TO YOU FOR ANY CAUSE WHATSOEVER, AND REGARDLESS OF THE FORM OF THE ACTION, WILL AT ALL TIMES BE LIMITED TO THE AMOUNT PAID, IF ANY, BY YOU TO COMPANY FOR THE SERVICE DURING THE TERM OF MEMBERSHIP, BUT IN NO CASE WILL THE COMPANY'S LIABILITY TO YOU EXCEED $1000. YOU ACKNOWLEDGE THAT IF NO FEES ARE PAID TO COMPANY FOR THE SERVICE, YOU SHALL BE LIMITED TO INJUNCTIVE RELIEF ONLY, UNLESS OTHERWISE PERMITTED BY LAW, AND SHALL NOT BE ENTITLED TO DAMAGES OF ANY KIND FROM COMPANY, REGARDLESS OF THE CAUSE OF ACTION.
CERTAIN STATE LAWS DO NOT ALLOW LIMITATIONS ON IMPLIED WARRANTIES OR THE EXCLUSION OR LIMITATION OF CERTAIN DAMAGES. IF THESE LAWS APPLY TO YOU, SOME OR ALL OF THE ABOVE DISCLAIMERS, EXCLUSIONS OR LIMITATIONS MAY NOT APPLY TO YOU, AND YOU MAY HAVE ADDITIONAL RIGHTS.
Termination
The Company may terminate your membership, delete your profile and any content or information that you have posted on the Site or through any Platform Application and/or prohibit you from using or accessing the Service or the Site or any Platform Application (or any portion, aspect or feature of the Service or the Site or any Platform Application) for any reason, or no reason, at any time in its sole discretion, with or without notice, including without limitation if it believes that you are under 13, or under 18 and not in high school or college. When we are notified that a user has died, we will generally, but are not obligated to, keep the user's account active under a special memorialized status for a period of time determined by us to allow other users to post and view comments.
Governing Law; Venue and Jurisdiction
By visiting or using the Site and/or the Service, you agree that the laws of the State of Delaware, without regard to principles of conflict of laws, will govern these Terms of Use and any dispute of any sort that might arise between you and the Company or any of our affiliates. With respect to any disputes or claims not subject to arbitration (as set forth below), you agree not to commence or prosecute any action in connection therewith other than in the state and federal courts of California, and you hereby consent to, and waive all defenses of lack of personal jurisdiction and forum non conveniens with respect to, venue and jurisdiction in the state and federal courts of California.
Choice of law and venue -- another electronic contracting favourite. Ditto for choosing the laws of Delaware. My journal article on unfair terms in electronic contracts discusses these types of clauses more fully.
Arbitration
YOU AND COMPANY AGREE THAT, EXCEPT AS MAY OTHERWISE BE PROVIDED IN REGARD TO SPECIFIC SERVICES ON THE SITE IN ANY SPECIFIC TERMS APPLICABLE TO THOSE SERVICES, THE SOLE AND EXCLUSIVE FORUM AND REMEDY FOR ANY AND ALL DISPUTES AND CLAIMS RELATING IN ANY WAY TO OR ARISING OUT OF THESE TERMS OF USE, THE SITE AND/OR THE SERVICE (INCLUDING YOUR VISIT TO OR USE OF THE SITE AND/OR THE SERVICE) SHALL BE FINAL AND BINDING ARBITRATION, except that: (a) to the extent that either of us has in any manner infringed upon or violated or threatened to infringe upon or violate the other party's patent, copyright, trademark or trade secret rights, or you have otherwise violated any of the user conduct rules set forth above or in the Code of Conduct then the parties acknowledge that arbitration is not an adequate remedy at law and that injunctive or other appropriate relief may be sought; and (b) no disputes or claims relating to any transactions you enter into with a third party through the Facebook Marketplace may be arbitrated.
Arbitration under this Agreement shall be conducted by the American Arbitration Association (the "AAA") under its Commercial Arbitration Rules and, in the case of consumer disputes, the AAA's Supplementary Procedures for Consumer Related Disputes ( the "AAA Consumer Rules") (collectively the "AAA Rules"). The location of the arbitration and the allocation of costs and fees for such arbitration shall be determined in accordance with such AAA Rules and shall be subject to the limitations provided for in the AAA Consumer Rules (for consumer disputes). If such costs are determined to be excessive in a consumer dispute, the Company will be responsible for paying all arbitration fees and arbitrator compensation in excess of what is deemed reasonable. The arbitrator's award shall be binding and may be entered as a judgment in any court of competent jurisdiction.
To the fullest extent permitted by applicable law, NO ARBITRATION OR CLAIM UNDER THESE TERMS OF USE SHALL BE JOINED TO ANY OTHER ARBITRATION OR CLAIM, INCLUDING ANY ARBITRATION OR CLAIM INVOLVING ANY OTHER CURRENT OR FORMER USER OF THE SERVICE, AND NO CLASS ARBITRATION PROCEEDINGS SHALL BE PERMITTED. In no event shall any claim, action or proceeding by you related in any way to the Site and/or the Service (including your visit to or use of the Site and/or the Service) be instituted more than three (3) years after the cause of action arose.
These types of clauses have been held to be unenforceable with increasing regularity in the US, especially in California (where Facebook is based). As a US court observed in a case involving Paypal's mandatory arbitration clause, these clauses are used by companies to "insulate [themselves] contractually from any meaningful challenge to [their] alleged practices". In any case, Australian consumers, and especially ones in NSW or Victoria, would probably have little difficulty in convincing an Australian court to apply the consumer protection legislation of their state of residence.
Here endeth the dissection. Some would describe my criticism of this agreement as paranoia. Peter Black would probably say that it's an exercise in balancing risk -- the chance of any of the provisions I've been criticised above being used against the interests of any particular Facebook user is pretty small (with the possible exception of what they do with your personal information, which is virtually certain to occur, but some people may not regard that as significant). If you avoided all risk, you'd never get anything done.
The risk should be balanced against the benefits that accrue from using Facebook. Putting a Posner-type analysis on it, if the benefits of using it outweigh the harm that could occur to you from any terms of the contract, discounted by the probability of that harm happening, it's rational to use it.
Theoretically, to properly evaluate that risk, you should read and take steps to understand the contracts. But, reading and understanding the contract itself has a cost, measured in time (to read it, conduct research etc) and money (obtaining legal advice). Not reading the contracts may in many cases be the rational choice. My journal article on unfair terms in electronic contracts at page 158-159 discusses reasons why this is the case.
The small possibility of harm justifying exposure to legal liability may be rational, in economic terms. By that line of thinking, the gains to be made by using peer-to-peer software to unlawfully download infringing copies of music and motion pictures may outweigh the risk of getting sued for doing so. This probably isn't a whole lot of comfort to Jammie Thomas, who recently was ordered to pay over US$200k for using file-sharing software to infringe copyright.
As for me? I'll keep reading the fine print. Apparently that means I'm paranoid.
Thanks for doing this analysis. I'm trying to get a handle on what the hidden costs of using facebook and this was very useful in detailing the user licence situation. As you say, it comes down to evaluating the usefulness versus the risk and impact of cost. Very good article. Thanks again!
Ross
I do have to agree with all the above points. Very nice dissection. I did find all the points that made me laugh that I see very often in these worthless things. Thanks for bringing them out so I could have myself a good laugh! Can you dissect Myspace or Tagged next? Tagged personell must be losing their ability to do anything themself, considering they are using Meebo for their chat engine now and it is rather useless too. This dissection makes me think of that chat engine and the Terms of Use being hand-in-hand. I wonder how many of the people that created these social-networking sites had their lunch money stolen from them...