Just over a month ago, and all in the span of a single week, Facebook.com announced a set of drastic changes to its Terms and Conditions, a massive revolt ensued, and just as quickly as it all started, Facebook retreated. As the dust settled, many great legal analyses of the events quickly made their way to the web, including one by a favorite Internet lawyer of mine, Eric Goldman. For the most part, everything that there is to be said about this episode from a legal perspective has been said: Facebook’s changes were unnecessary and over-reaching, their initial response was a joke, and everyone who told them so was proven right by Facebook’s ultimate backing off. But as Facebook begins re-drafting their terms, this time with the input of their community, it is a great time to consider what business lessons may be gleaned from Facebook’s recent experience.
Terms and conditions for websites have an interesting but short history. Such things were not commonly needed until use of the web became popular among average consumers in roughly the first half of the 1990s. Further, things did not get particularly tricky for drafters of such terms and conditions until the appearance of highly dynamic web services. Users began contributing data as a major feature of sites, and, ultimately, just about every kind of commerce or social activity transpiring in the real world could be found online. As things stand now, the terms and conditions of a website might ultimately be the single most important legal document that a company has drafted—certainly could be strongly argued for user generated content sites such as Flickr or YouTube, and by extension Facebook, which offers many similar functions as those sites.
The lessons here are:
Take your website terms and conditions seriously, and recognize that they should be tailored to the specific operation and needs of your business. Slapping in the most egregious version you (or your lawyer) can find from some behemoth company’s website is probably going to cause headaches.