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.

Aaron P. Rubin

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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Lawrence Gallick

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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California’s AB 370, if signed by Gov. Jerry Brown, would be the first piece of legislation in the world directly addressing “do not track” (DNT) to become law.

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“Do Not Track” Comes to CalOPPA | Socially Aware

Julie O'Neill

California’s AB 370, if signed by Gov. Jerry Brown, would be the first piece of legislation in the world directly addressing “do not track” (DNT) to become law. It has passed both houses of the California Legislature and would likely take effect in January. The bill, which would amend California’s existing Online Privacy Protection Act (CalOPPA), requires website operators to explain how they respond to DNT signals or “other mechanisms that provide consumers the ability to exercise choice regarding the collection of personally identifiable information about an individual consumer’s online activities over time and across third-party Web sites or online services, if the operator engages in that collection.” See Cal. Bus. & Prof. Code §§ 22575(5).Like California’s data breach notification law, this would be a disclosure law, not a law creating new consumer rights or imposing substantive requirements on companies. That said, like the data breach notification law before it, its aim seems to be to pressure companies to make substantive changes (here, by responding to DNT signals; in the case of the breach notification law, by developing better data security practices to reduce the frequency of embarrassing disclosures).Because CalOPPA applies to any website, online service or (according to the California Attorney General) mobile application that collects personally identifiable information from “consumers residing in California” (each, a “Site”), the law, if enacted, would have a de facto nationwide reach. As a result, while there have been rumblings about federal DNT legislation, California would set a new nationwide disclosure standard.The big question, however, is what exactly Site operators would need to disclose. The challenge they would face is made particularly acute by the fact that the meaning of DNT is not clear, nor clearly defined, in the law itself or by industry, despite more than two years of negotiations at the World Wide Web Consortium (W3C).WHAT IS CALOPPA? CalOPPA currently requires Site operators to post a privacy policy that does the following:• Identifies the categories of personally identifiable information collected;• Provides a description of the process for an individual consumer who uses or visits a Site to review and request changes to his or her personally identifiable information that has been collected, if the Site offers such a process;• Describes the process by which consumers will be notified of material changes to the privacy policy; and• Identifies the effective date of the policy.AB 370 AND “DO NOT TRACK” Assuming the Governor signs AB 370—and it survives near certain legal challenges—Site operators will need to: (1) explain in their privacy policies how they respond to web browser DNT signals and (2) disclose applicable third-party data collection and use policies.Before getting into the nuts and bolts of the new disclosure requirements, it might be helpful to step back to look at exactly what DNT is—or is intended to be. The idea behind a DNT mechanism is that it should provide consumers with an easy means to control the tracking of their online activities. DNT is technically straightforward. When a DNT preference is enabled in a device browser or mobile app (including if it is enabled by default), the “DNT:1” header is transmitted to the requesting server along with other header information. DNT is intended to be an expression of the user’s preferences regarding online tracking; however, the actual meaning of DNT—and what “honoring” DNT means—has been a considerable obstacle to its implementation. In other words, once the DNT header is received, what is the receiving server supposed to do?For more than two years, a W3C working group has struggled with these issues. The collection and use of data by the Site the user is on (i.e., the first party Site) may not be covered by the DNT opt-out. But what about third parties? The latest W3C working draft would bar third-party data collection, use and sharing upon receipt of the DNT:1 header unless such collection, use or sharing falls into an exception, such as fraud detection, marketing research or analytics—and even those exceptions were vigorously contested. With the W3C process currently stalled and without a leader, California has entered the fray, albeit without attempting to address these difficult and disputed questions.WHAT DOES THE NEW “DO NOT TRACK” DISCLOSURE MEAN FOR SITE OPERATORS? The amended CalOPPA would require Site operators to explain in their privacy policies how they respond to DNT signals or “other mechanisms that provide consumers the ability to exercise choice regarding the collection of personally identifiable information about an individual consumer’s online activities over time and across third-party Web sites or online services, if the operator engages in that collection.” See Cal. Bus. & Prof. Code § 22757(5).The problem is what to say in order to comply with this requirement. Sites face the lack of a clear definition of what exactly DNT entails, and thus of how exactly to disclose their response to DNT signals. For now, it would be a mistake to represent that one “honors” DNT signals because that representation may be interpreted to mean more than the company’s actions warrant. Assuming the bill takes effect, it would be best, for the time being, to comply with the facts: if your Site engages in activities triggering the required disclosure, do you do anything in response to the DNT:1 header? If not, say so. The law requires only a disclosure. If, on the other hand, you do something in response to receipt of a DNT:1 disclosure, say exactly what you do (e.g., do you continue to collect data but stop the creation of profiles for online behavioral advertising purposes?). This is a disclosure law, not a law establishing new consumer rights, and it can be breached by failure to disclose, or to disclose accurately, the required information.The required disclosure may be made by link within an operator’s privacy policy “to an online location containing a description, including the effects, of any program or protocol the operator follows that offers the consumer that [do not track or other] choice [mechanism].” See id. § 22575(7). That is, there can be some central website or entity—perhaps even an industry self-regulatory website—that can provide an industry-wide response to the DNT question.Finally, AB 370 addresses third-party data sharing. It would require Site operators to disclose “whether other parties may collect personally identifiable information about an individual consumer’s online activities over time and across different Web sites when a consumer uses the operator’s Web site or service.” See id. § 22575(6). In other words, an operator must inform users about the data collection and use practices of other entities on its own Site, if those entities are also collecting data on different websites over time.Since AB 370 simply expands the requirements of CalOPPA, the rest of the current CalOPPA regime will presumably apply. That means that Site operators will have violated the revised statute only if they fail to post a compliant privacy policy within 30 days of notice of non-compliance. Furthermore, while there is no private right of action, the California Attorney General can enforce the law. Any penalties for a violation would be under the California Unfair Competition Law, which imposes a maximum civil penalty of $2,500 per violation.While California has not by legislative fiat defined DNT or what honoring DNT means in terms of data collection and use, the prospect of new CalOPPA disclosure requirements certainly creates an additional incentive for the players in the online ecosystem to reach a consensus on what honoring DNT means. In the meantime, Site operators will have to be careful to avoid promising something that they cannot honor, if only because they cannot define it.