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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Lawrence W. Gallick

2024 Recap: Ten Lords A-Leaping!

Social Links: If the Suit Fits

Social Links: Age Verification, X Appeal, and the Great White North

Social Links: Fake Reviews, Real Rulings, and an Epic Fail

Lawrence W. Gallick on Toth v. Everly Well, Inc.

Double-check before swiping right. Ubiquitous dating app Tinder scored a court victory when the U.S. District Court in New Jersey ruled in <a href="https://law.justia.com/cases/federal/district-courts/new-jersey/njdce/2:2023cv23115/537965/12/" target="_blank">Ciapinska v. Tinder</a> that the arbitration clause in the app’s terms of use (TOU) is binding. At the center of the suit is Tinder’s <a href="https://www.help.tinder.com/hc/en-us/articles/360034941812-Photo-Verification" target="_blank">photo verification</a> process. The plaintiff <a href="https://bronx.news12.com/elmwood-park-nj-woman-suing-tinder-claims-photos-being-used-fake-accounts" target="_blank">brought the action in late 2023</a> when she discovered that a number of fake accounts, which had passed Tinder’s verification protocol, were using her photos – even though she left the platform in 2019. In the ruling, Judge Jamal K. Semper wrote, “[Plaintiff] created numerous accounts and even purchased a subscription indicating sufficient opportunity to consult and assent to the TOU before continuing to use the platform.” Tinder maintains that its verification tool is not a guarantee.TikTok finds itself facing a federal lawsuit over the <a href="https://www.independent.co.uk/news/world/americas/crime/tiktok-blackout-challenge-nyla-anderson-b1980820.html" target="_blank">tragic death</a> of a ten-year-old girl who passed away while attempting the viral “blackout challenge.” The challenge dares users to choke themselves to unconsciousness and stream the act on TikTok. The deaths of <a href="https://www.bloomberg.com/news/features/2022-11-30/is-tiktok-responsible-if-kids-die-doing-dangerous-viral-challenges" target="_blank">more than a dozen children</a> have been linked to the viral trend. TikTok parent company ByteDance maintained that Section 230 immunized it from liability, but <a href="https://fingfx.thomsonreuters.com/gfx/legaldocs/mopaqabzypa/08272024tiktok.pdf" target="_blank">three federal judges disagreed</a>. U.S. Circuit Judge Patty Shwartz wrote that Section 230 only immunizes information provided by third parties, not recommendations that TikTok itself made via an algorithm underlying its platform, adding: “TikTok makes choices about the content recommended and promoted to specific users, and by doing so, is engaged in its own first-party speech.” This begs a question: Does any effort to curate the presentation of third-party content automatically make it first-party content and therefore not protected under Section 230?Dupe.com, a startup search tool that scrapes the web for knockoff versions of name-brand products at steep discounts, is <a href="https://www.bloomberglaw.com/public/desktop/document/WilliamsSonomaIncvCarrotCartIncdbaDupecomDocketNo124cv06597SDNYAu?doc_id=X1965IOOO1191OA3O1STJOT2OF2" target="_blank">being sued</a> by home retail colossus Williams-Sonoma. The complaint, which was filed in the U.S. Court for the Southern District of New York, maintains that <a href="https://dupe.com/" target="_blank">Dupe.com</a> illegally used furniture images made by the Williams-Sonoma creative team to promote its online search tool and craft social media ads disparaging the William-Sonoma family of brands. The lawsuit asserts claims for copyright infringement, false advertising, unfair competition, and deceptive trade practices. With the <a href="https://businessofhome.com/articles/furniture-dupes-kim-kardashian-donald-judd-knockoffs#:~:text=Dupe.com%20can%20absolutely%20be,nothing%20clandestine%20about%20that%20functionality." target="_blank">proliferation of dubious online retailers</a> offering counterfeit versions of premier products, we’ll be watching this litigation closely.A <a href="https://www.dailycal.org/news/state/sb-976-approved-aims-to-protect-kids-from-social-media-addiction/article_59dd5e9c-6a6d-11ef-b6f1-87863c2fb22d.html" target="_blank">California bill</a> designed to stop social media companies from using algorithms to target minors has passed the state legislature and is headed to Governor Gavin Newsom’s desk. The legislation is similar to laws <a href="https://www.democratandchronicle.com/story/news/2024/06/10/ny-passes-ban-on-addictive-social-media-for-children-how-it-works/74043024007/" target="_blank">recently passed in New York</a> and could mark the beginning of a significant shift in social media policy across the United States. If the Governor signs <a href="https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB976" target="_blank">the bill</a>, social media companies would be prohibited from providing an algorithm-driven social media feed to anyone younger than eighteen in the state of California. It would also ban social media notifications during school hours and at night without prior parental consent. Proponents of the bill feel legislation is necessary to protect children, while critics maintain the law will be difficult to enforce and could be susceptible to misuse.Everyone’s mom’s favorite soft rock icon, Barry Manilow, <a href="https://variety.com/2024/music/news/barry-manilow-sues-hipgnosis-unpaid-funds-1236129154/" target="_blank">has sued</a> Hipgnosis Songs Fund, a music IP investment and song management company that acquired the Manilow catalog in 2020. The suit alleges that Hipgnosis has not paid more than $1 million in contractually obligated bonus payments. Manilow sold the song catalog to Hipgnosis based on promises that the company would exploit social media and spark a <a href="https://www.tiktok.com/@dinandtonics/video/7375244202457845038" target="_blank">“Copacabana” dance trend</a> on TikTok. To the surprise of no one (except perhaps Mr. Manilow), this did not happen. Instead, Hipgnosis hemorrhaged cash after a number of <a href="https://www.forbes.com/sites/marisadellatto/2023/01/24/justin-bieber-sells-music-rights-for-over-200-million-to-hipgnosis-songs-capital/" target="_blank">high-profile catalog acquisitions</a> and was sold to Blackstone in July 2024. Social media and music streaming have confounded the old guard of the music industry as they’re eclipsed by younger, more tech-savvy artists who have a deeper understanding of the contemporary music business landscape. Despite the nearly identical names, Hipgnosis Songs Fund is not related to the art collective Hipgnosis that designed all your <a href="https://wimwords.com/the-hipgnosis-album-cover-gallery/" target="_blank">favorite 1970s album covers</a>.

Social Links: Tinder, TikTok, and the Copacabana

Social Links: Tinder, TikTok, and the Copacabana

Double-check before swiping right. Ubiquitous dating app Tinder scored a court victory when the U.S. District Court in New Jersey ruled in Ciapinska v. Tinder that the arbitration clause in the app’s terms of use (TOU) is binding.

Lingo Telecom, a Georgia-based VoIP service operator, has agreed to pay a <a href="https://www.nbcnews.com/politics/2024-election/telecom-company-agrees-1-million-fine-biden-deepfake-rcna167564" target="_blank">$1 million fine</a> for using AI-generated deepfake technology to spoof President Joe Biden’s voice in a series of robocalls. A Louisiana political consultant had <a href="https://www.reuters.com/world/us/us-political-consultant-indicted-over-ai-generated-biden-robocalls-2024-05-23/" target="_blank">previously been indicted</a> for arranging and financing the calls, which targeted New Hampshire and encouraged Democrats to skip voting in the state’s primary. This action comes on the heels of the unanimous passage of the DEFIANCE Act by the U.S. Senate last month. As we <a href="https://www.sociallyawareblog.com/topics/social-links-july-2024" target="_blank">reported previously</a>, the DEFIANCE Act addresses deepfake pornography but is likely to open the door to additional legal action for bad actors using AI deepfakes.Google has <a href="https://arstechnica.com/tech-policy/2024/08/google-avoids-link-tax-bill-with-deal-to-fund-california-journalism-and-ai/" target="_blank">reached an agreement</a> with California lawmakers to fund newsrooms and launch an AI accelerator intended to “support journalists’ work.” The plan commits the tech giant to $167.5 million over five years, with the state initially contributing an additional $30 million, and $10 million in each of the next four years. The state will in turn shelve the <a href="https://digitaldemocracy.calmatters.org/bills/ca_202320240ab886" target="_blank">California Journalism Preservation Act</a>, which would have forced Google and other major tech companies to pay news companies to distribute their content online. Governor Gavin Newsom remarked, “[The deal is] a major breakthrough in ensuring the survival of newsrooms and bolstering local journalism across California — leveraging substantial tech industry resources without imposing new taxes on Californians.” Journalism unions in California are <a href="https://www.mediaguildwest.org/news/californias-journalists-do-not-consent-to-this-shakedown" target="_blank">significantly less enthusiastic</a>. In a joint statement, Media Guild of the West, NewsGuild-CWA, and others wrote, “The future of journalism should not be decided in backroom deals. The Legislature embarked on an effort to regulate monopolies and failed terribly. Now we question whether the state has done more harm than good.”Major record labels have <a href="https://www.reuters.com/legal/litigation/major-labels-ask-us-supreme-court-reconsider-1-bln-cox-copyright-case-2024-08-21/" target="_blank">asked the Supreme Court</a> to overturn a decision that wiped out a <a href="https://variety.com/2019/music/news/cox-communications-music-copyright-suit-verdict-1203449254/" target="_blank">$1 billion copyright infringement</a> verdict against Cox Communications. In February 2024, the 4th Circuit Court of Appeals in Virginia <a href="https://variety.com/2024/music/news/major-labels-billion-cox-communications-overturned-1235917187/" target="_blank">overturned the jury verdict</a> that determined Cox was vicariously liable for its users’ copyright infringement. If a higher court hears the case, the decision may be consequential for other copyright litigation. Read the <a href="https://fingfx.thomsonreuters.com/gfx/legaldocs/znvnxgwbjvl/USA%20COURT%20COX%20COPYRIGHT%20labelcert.pdf" target="_blank">petition in its entirety</a>.Since <a href="https://www.cnbc.com/2024/03/21/reddit-ipo-rddt-starts-trading-on-nyse.html" target="_blank">going public</a> in March 2024, Reddit has taken a unique approach to advertising that it is betting will set the longtime social media giant apart from tech rivals like Google. As Reddit users are for the most part anonymous, demographic targeting by age, gender, or location isn’t a practical approach. Instead, an “<a href="https://finance.yahoo.com/news/reddit-battles-meta-google-using-090003960.html" target="_blank">interest-based</a>” strategy positions ads within the site’s niche communities (known as subreddits) in a more conversational style. With the online advertising economy based so heavily on granular user data, pivoting to a more general dataset is a gamble the company is confident will pay off. It may also be effective to avoid some of the privacy concerns that Reddit’s rivals <a href="https://www.forbes.com/councils/forbescommunicationscouncil/2024/08/23/the-balancing-act-googles-cookie-conundrum-and-the-future-of-advertising/" target="_blank">face</a> with their more personalized approach. <a href="https://www.adexchanger.com/platforms/coo-jen-wong-on-why-reddit-is-ready-to-become-a-mature-advertising-business/" target="_blank">COO Jen Wong</a> feels the site’s anonymity allows users to be much more open and honest in expressing interests, and she said, “When people come to Reddit, they reveal things about themselves that they would not reveal on other platforms.” Reddit’s stock price is up 57% from its $34 initial public offering price.

Social Links: Deepfakes, AI, and the Continuing Saga of Reddit

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.

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.











Anthony Ramirez

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 Rubin

Social Links: Deepfakes, AI, and the Continuing Saga of Reddit

Lingo Telecom, a Georgia-based VoIP service operator, has agreed to pay a $1 million fine for using AI-generated deepfake technology to spoof President Joe Biden’s voice in a series of robocalls.

The Federal Trade Commission has finalized a <a href="https://www.ftc.gov/business-guidance/blog/2024/08/well-pay-you-give-our-new-rule-good-review">new rule</a> aimed at curtailing false, misleading, and otherwise fraudulent reviews on online retail sites. Fake reviews are a <a href="https://pushpullagency.com/blog/a-deep-dive-into-amazon-consumer-review-statistics/">significant problem</a> for the big e-commerce platforms, given that a robust customer review system is crucial to modern e-commerce business models. In fact, <a href="https://pushpullagency.com/blog/a-deep-dive-into-amazon-consumer-review-statistics/">studies</a> have shown that a one-star rating increase in a product review can result in as much as a 26% increase in sales. Unsurprisingly, this has caused a proliferation of fake reviews and “<a href="https://www.theguardian.com/money/2023/apr/22/it-can-be-incredibly-profitable-the-secret-world-of-fake-online-reviews">review brokers</a>.” The new FTC rule is pretty comprehensive and worth a <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/r311003consumerreviewstestimonialsfinalrulefrn.pdf">full read</a>.New York trademark attorney Jeremy Green Eche hit the jackpot—and may have run afoul of <a href="http://www.internetlibrary.com/publications/anticybsquattSamson9-05_art.cfm">federal anti-cybersquatting law</a>—when he recently sold the HarrisWalz.com domain for $15,000. Eche <a href="https://www.cbsnews.com/news/harris-walz-domain-name-sold-for-1500/">purchased the domain in 2020</a> for $8.50. Though cybersquatting law is focused predominantly on trademark protection, it includes a provision barring any registration that “consists of the name of another living person” without their consent and “with the specific intent to profit” from its sale. This isn’t the first time Eche got lucky purchasing domains. In 2016, he <a href="https://www.usatoday.com/story/news/politics/onpolitics/2016/10/03/clinton-kaine-trump-website/91462708/">sold ClintonKaine.com to the Trump campaign,</a> also for $15,000. Eche denied being profit-driven, noting the relatively low price he put on both the Harris and Clinton domains. That the “relatively low” price happens to be slightly less than the cost of pursuing a cybersquatting case against him is probably just a coincidence, right?The U.S. Court of Appeals for the Ninth Circuit has ruled that employers may be subject to lawsuits based on their employees’ off-work social media posts. In <a href="https://casetext.com/case/okownowsky-v-garland">Okonowsky v. Garland</a>, the court unanimously ruled that an employee of a federal prison was sexually harassed on Instagram by a coworker in violation of Title VII of the 1964 Civil Rights Act. Following the ruling, plaintiff’s attorney Drew Pletcher said, “It appears to be the first holding in the Ninth Circuit to find that social media posts on an Instagram page could be considered workplace harassment under Title VII.” In the wake of this ruling, companies will need to consider whether their employee social media policies adequately address abusive or harassing behavior both inside and outside the workplace, including on personal social media.Ye, the artist formerly known as Kanye West, <a href="https://usaherald.com/kanye-west-faces-1-5m-copyright-suit-over-unauthorized-photo-use/">has been hit</a> with a $1.5 million copyright infringement lawsuit by celebrity photography sites <a href="https://usa.backgrid.com/">BackGrid USA</a> and <a href="https://uk.backgrid.com/">BackGrid UK</a>. The paparazzi companies allege Ye posted 10 BackGrid-owned photos to his Instagram account without permission or compensation. While it may seem counterintuitive that celebrities cannot post photos of themselves on their own social media, this is actually a fairly common fact pattern, and one that we <a href="https://www.sociallyawareblog.com/topics/by-winning-motion-to-dismiss-supermodel-loses-chance-to-clarify-whether-she-can-lawfully-post-photos-of-herself-to-social-media">have covered previously</a>. For Ye, in any event, this will not be the first time he has <a href="https://edition.cnn.com/2014/03/17/showbiz/kanye-west-plea-deal/">tangled with paparazzi</a>.Embattled Georgia attorney Lin Wood has been <a href="https://lawandcrime.com/high-profile/pro-trump-defamation-attorney-lin-wood-must-pay-former-law-partners-4-5-million-after-defaming-them-as-criminal-extortionists-on-social-media/">ordered to pay</a> his former law partners $4.5 million after an <a href="https://www.documentcloud.org/documents/25049449-lin-wood-defamation-damages">Atlanta jury found him liable</a> for defaming them on social media. The feud began, like so many do, as an argument over money. The federal court’s initial <a href="https://storage.courtlistener.com/recap/gov.uscourts.gand.301086/gov.uscourts.gand.301086.90.0.pdf">ruling</a> contained some not-so-subtle jabs at Wood. Judge Michael L. Brown wrote, “During a five-week period the following year, Defendant repeatedly accused Plaintiffs of criminal extortion in a series of messages he posted on a social media platform called Telegram. Hundreds of thousands of people viewed Defendant’s messages.” Brown continued, adding: “Tellingly, Defendant does not even try to show his accusations were true. Indeed, he admits Plaintiffs did not commit ‘the crime of extortion.’ But he insists his extortion accusations were still non-false because they contained ‘loose, figurative, or hyperbolic language’ that no reasonable person could construe as a genuine accusation of criminal conduct. The Court disagrees.” Lin Wood’s Telegram page can be viewed <a href="https://t.me/s/linwoodspeakstruth?before=50839">here</a>.A paywall for Reddit? CEO Steve Huffman <a href="https://www.pcmag.com/news/reddit-ceo-teases-paywalled-subreddits">hinted</a> at subscription-only features for the wildly popular news aggregation and social forum site during an <a href="https://s203.q4cdn.com/380862485/files/doc_financials/2024/q2/Reddit-Q2-24-Earnings-Call_Transcript.pdf">earnings call</a> with investors. Unsurprisingly, Redditors had a snarky, and often hilarious, <a href="https://www.reddit.com/r/technology/comments/1emac0p/some_subreddits_could_be_paywalled_hints_reddit/">meltdown</a> on the site. Despite its popularity, Reddit has struggled to become profitable. It’s a top site for AI web scrapers, which prompted the company to <a href="https://www.pcmag.com/news/microsofts-bing-search-engine-gets-ai-overviews-as-reddit-blocks-it">block Microsoft’s Bing</a> search engine and enter into an <a href="https://www.theverge.com/2024/2/22/24080165/google-reddit-ai-training-data">agreement with Google</a> for site access for AI training. Of the data sharing and web scraping situation, Huffman said, “[Our] preference is to have relationships with everybody, but we need to be very considered of where Reddit data goes and what it’s used for.”

 Social Links: Recent Developments in the Law and Business of Social Media

Social Links: Recent Developments in the Law and Business of Social Media

The Federal Trade Commission has finalized a new rule aimed at curtailing false, misleading, and otherwise fraudulent reviews on online retail sites.

Social Links: Recent Developments in the Law and Business of Social Media

Social media giant TikTok has been <a href="https://www.theguardian.com/technology/article/2024/aug/02/us-sues-tiktok-bytedance-child-privacy" target="_blank">sued by the United States</a> for allegedly collecting data on children under thirteen illegally. The suit claims the app, which is owned by China-based parent company ByteDance, allowed millions of children to create accounts without parental knowledge or consent despite <a href="https://www.wired.com/story/tiktok-ftc-record-fine-childrens-privacy/" target="_blank">paying a fine of $5.7 million</a> for similar activity in 2019. The United States is seeking penalties of up to $51,744 per violation, per day. The suit comes just three months after TikTok sued the U.S. government over a law that could ban it across the country. Read the <a href="https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rS0wyWEeUli0/v0" target="_blank">complaint</a> in its entirety.The U.S. Court of Appeals for the D.C. Circuit <a href="https://publishers.org/news/dc-circuit-court-rejects-effs-challenge-to-dmca-confirms-symbiotic-relationship-of-copyright-law-and-free-expression/" target="_blank">has rejected</a> a challenge to one aspect of the Digital Millennium Copyright Act (<a href="https://www.copyright.gov/dmca/" target="_blank">DMCA</a>). The action was initially brought by Electronic Frontiers Foundation (EFF) in 2016 and argued that Section 1201 of the DMCA – which prohibits the circumvention of technological measures that protect copyrighted works – is unconstitutional under the First Amendment. The <a href="https://publishers.org/wp-content/uploads/2024/08/Green-v-DOJ-opinion-2024.08.02.pdf" target="_blank">ruling</a> filed by Judge Nina Pillard states that while the First Amendment protects the right to read, it does not guarantee unrestricted access to all reading materials one might desire and does not guarantee potential fair users exceptional access to copyrighted works they wish to include in their expression. EFF maintains that the decision favors large commercial entities over individual fair users and sets a dangerous precedent for the future.Pickpocketing via tweet? Investor and online financial personality Andrew Left deleted his research firm’s entire tweet history from social media platform X ahead of his 19-count <a href="https://prod-i.a.dj.com/public/resources/documents/andrew-left-indictment07-26-2024.pdf" target="_blank">securities fraud indictment</a> and <a href="https://storage.courtlistener.com/recap/gov.uscourts.cacd.934731/gov.uscourts.cacd.934731.1.0.pdf">SEC lawsuit.</a> According to the SEC complaint, Left allegedly engaged in bait-and-switch schemes that involved making public recommendations contrary to his private trading positions which netted him $20 million in illicit gains between 2018 and 2023. The SEC also accused Left of sharing his planned announcements with at least two hedge funds in advance, receiving a portion of their trading profits in return. Left used X as a platform to promote short positions on a number of major companies including Roku, American Airlines, and Beyond Meat. The government maintains that Left’s public tweets were intended to illegally manipulate the market.<a href="https://www.theguardian.com/technology/article/2024/aug/06/elon-musk-x-advertising-lawsuit-antitrust" target="_blank">X has filed suit</a> against several major companies and a global advertising alliance. The suit accuses them of conspiring to boycott the social media platform and withhold advertising dollars in an attempt to damage the platform. Advertising revenue on X has declined since Elon Musk acquired the company in 2022, with many brands expressing concerns over the platform’s lack of content moderation. X chief executive Linda Yaccarino <a href="https://x.com/lindayaX/status/1820838134470328676" target="_blank">characterized the alleged boycott</a> in terms more sociological than financial, writing: “The consequence – perhaps the intent – of this boycott was to seek to deprive X’s users, be they sports fans, gamers, journalists, activists, parents or political and corporate leaders, of the Global Town Square.”Legislation targeting malicious use of deepfake technology <a href="https://www.govtech.com/policy/lawmakers-introduce-bipartisan-bill-to-fight-ai-deepfakes" target="_blank">continues to expand</a> and seems to be among the very few issues that can reliably garner bipartisan support. Representatives Ashley Hinson (R-IA) and Jake Auchincloss (D-MA) have <a href="https://auchincloss.house.gov/media/press-releases/release-auchincloss-introduces-bipartisan-bill-to-tackle-rise-in-non-consensualdeepfakes-on-social-media-platforms" target="_blank">introduced a bill</a> that would eliminate Section 230 protections for tech companies that allow deepfake pornography on their platforms. The bill would require tech firms to implement a “clear and accessible process for reporting, investigating and removing harmful content within 24 hours.” Additionally, it would require data logging that victims could access and a process for removing the offending content. This House bill is on the heels of related deepfake legislation that recently <a href="https://gizmodo.com/anti-deepfake-porn-bill-unanimously-passes-in-the-senate-2000479051" target="_blank">passed the Senate unanimously</a>.

Social Links: August 2024

Social Links: August 2024

Social media giant TikTok has been sued by the United States for allegedly collecting data on children under thirteen illegally. 

In a rare example of bipartisan agreement, the dramatically named DEFIANCE (Disrupt Explicit Forged Images and Non-Consensual Edits) Act unanimously <a href="https://gizmodo.com/anti-deepfake-porn-bill-unanimously-passes-in-the-senate-2000479051" target="_blank">passed the Senate</a>. The bill allows victims of AI-generated deepfake pornography to sue anyone who knowingly creates, receives, or distributes such images. It only addresses civil liability and only applies to pornographic content, but we would not be surprised to see more expansive legislation in this area in the future.Utah’s stringent social media laws survived a court challenge when a federal judge <a href="https://www.ksl.com/article/51076729/federal-judge-dismisses-claim-in-lawsuit-against-utahs-social-media-laws" target="_blank">dismissed a claim</a> by NetChoice that the legislation was preempted by federal law under Section 230. The dismissal by U.S. District Judge Robert J. Shelby cited autoplay, seamless pagination, and notifications on minors’ accounts as outside the scope of Section 230. Utah has become a <a href="https://www.ksl.com/article/50846522/utah-residents-suing-state-over-soon-to-be-enacted-social-media-restrictions" target="_blank">flashpoint</a> in the debate over social media, its impact on children, and related First Amendment concerns.Meta has <a href="https://about.fb.com/news/2024/07/combating-financial-sextortion-scams-from-nigeria/" target="_blank">removed more than 60,000 accounts</a> involved in sexual extortion scams aimed predominantly at men in the United States. The accounts were based in the fraud hotbed of Nigeria and used sexually compromising photos—both real and fake—to blackmail victims. The vast majority of the now-deleted accounts were on Instagram, but Meta also deactivated more than 7,000 Facebook accounts, pages, and groups that offered advice (including scripts) on how to defraud people. Although mostly targeting adults, there were also attempts against minors, which Meta reported to the U.S. National Center for Missing and Exploited Children.In another uncharacteristically bipartisan vote, the <a href="https://www.nbcnews.com/politics/congress/senate-poised-pass-significant-child-online-safety-bills-decades-rcna164259" target="_blank">Senate voted 91-3 in favor</a> of the Children and Teens’ Online Privacy Protection Act (COPPA 2.0) and the Kids Online Safety Act (KOSA). This is significant legislation that would create a legal “duty of care” for social media companies to prevent and mitigate harm. Violators would be subject to penalties enforced by the Federal Trade Commission. Opponents argue that the bill’s definition of harm is too broad and could lead to censorship of content that promotes politically polarizing issues, gender equality, or abortion rights. The bill will now go to the House, where its passage is less certain. Should it pass, this legislation would dramatically impact the operations of social media companies. We’re watching this very closely.Red-hot AI startup Perplexity has <a href="https://www.msn.com/en-us/news/technology/nvidia-backed-perplexity-ai-inks-deal-with-publishers-to-put-ads-in-search-engine/ar-BB1qTjUy?ocid=BingNewsVerp" target="_blank">entered into agreements</a> with several major media companies including Time, Fortune, and Automattic (owner of WordPress). Perplexity will begin featuring its partners’ content in AI-assisted search results and providing a percentage of the ad revenue. This move is on the heels of plagiarism accusations by news organizations such as Forbes and Condé Nast, the latter of which <a href="https://www.engadget.com/conde-nast-has-reportedly-accused-ai-search-startup-perplexity-of-plagiarism-191639677.html" target="_blank">reportedly sent a cease and desist</a> letter to the startup.The US Copyright Office <a href="https://cointelegraph.com/news/us-copyright-office-reports-urgent-need-protection-ai-law-deepfakes" target="_blank">issued a report</a> calling on Congress to take urgent action on the distribution of unauthorized deepfakes. The report is a result of its 2023 initiative to examine the intellectual property implications of generative AI. The speed of technology has always challenged lawmakers to keep up with bad actors, but AI deepfake capability has moved at staggering speed. <a href="https://www.fastcompany.com/91165063/microsoft-white-paper-new-laws-ai-deepfakes-frauid" target="_blank">Microsoft</a> has also called for Federal legislation addressing deepfakes.

Social Links: July 2024

A few months ago, we <a href="/topics/state-lawmakers-introduce-laws-governing-teen-use-of-social-media" target="_self">highlighted</a> the many pending and enacted state-level social media laws targeting minors’ use of social media. Since then, political and industry groups have begun to push back, calling into question whether these types of social media laws will ultimately be successfully implemented. Most recently, pending or enacted laws in Mississippi, New York, and California are facing overlapping challenges.Mississippi. A federal district court judge <a href="https://news.bloomberglaw.com/product/blaw/bloomberglawnews/exp/eyJpZCI6IjAwMDAwMTkwLTUxMjEtZGVlOS1hM2JkLWZkYjc3OGE4MDAwMSIsImN0eHQiOiJURU5XIiwidXVpZCI6InllRlhUR0g5M1htWXlyc3Zrc1k5YlE9PURoVjZoUVBQZ2s4bGFuQ1dLREVpbGc9PSIsInRpbWUiOiIxNzE5OTE5MzIzMDk1Iiwic2lnIjoid0hmdXg4cllXTzU3MGtERlJmNGRpNjJQVWUwPSIsInYiOiIxIn0=?source=newsletter&item=read-text&region=top%20stories%20digest&channel=tech-and-telecom-law" target="_blank">blocked</a> Mississippi’s attorney general from enforcing <a href="https://billstatus.ls.state.ms.us/documents/2024/html/HB/1100-1199/HB1126PS.htm" target="_blank">H.B. 1126</a> (the Walker Montgomery Protecting Children Online Act) on July 1, 2024, the day it was set to go into effect. The law would require social media platforms both to obtain parental consent for minors to use the platforms and to verify user ages. The internet trade association NetChoice sued the state on June 7, 2024, arguing that the law was unconstitutional. The court found that the state attorney general failed to show that alternatives to the law are insufficient for the state’s objective of protecting children, as mandated under the required strict scrutiny standard, and upheld a preliminary injunction of the law. Most recently, the court <a href="https://news.bloomberglaw.com/product/blaw/bloomberglawnews/exp/eyJpZCI6IjAwMDAwMTkwLWJjOTctZGMxMy1hMzkwLWJlOTdlNjNhMDAwMSIsImN0eHQiOiJURU5XIiwidXVpZCI6IkhFRDhlcEFJLzdvM2wrWU5HeDN5SlE9PUJONmNRSWxZandBaktLZlNXV0p2RXc9PSIsInRpbWUiOiIxNzIxMjE2MTI1MjQ1Iiwic2lnIjoiakpEb3hpYjlVSDMra1MrekhnQ2lnU2s0Mkc4PSIsInYiOiIxIn0=?source=newsletter&item=read-text&region=digest&channel=tech-and-telecom-law" target="_blank">denied</a> the attorney general’s motion to allow the law to go into effect pending appeal. As we previously reported, NetChoice has already prevailed in similar cases involving state social media laws in Ohio, California, and Arkansas.New York. In June, New York enacted <a href="https://www.nysenate.gov/legislation/bills/2023/S7694/amendment/A" target="_blank">S.B. 7694A</a> (the SAFE For Kids Act), which requires age verification by social media platforms to determine whether users need to seek parental consent to use such platforms. The state attorney general is tasked with determining the rules for verifying ages and identities of legal guardians. However, she faces significant opposition from tech industry groups, as well as practical hurdles in determining an adequate age verification process to require from platforms. Strict standards that require personal information could face privacy issues, while less stringent measures could allow easy circumvention. Age verification is also <a href="https://news.bloomberglaw.com/product/blaw/bloomberglawnews/exp/eyJpZCI6IjAwMDAwMThmLWNhMjQtZGIyOS1hYmFmLWRiNzQzOTRjMDAwMSIsImN0eHQiOiJURU5XIiwidXVpZCI6Ikh2QitXbk1SYzluVmhqRVZqUEgwRGc9PUxqSGQ5WXFPcW0va1VPQ1NEZ2hycWc9PSIsInRpbWUiOiIxNzE3MTUzMTM1MTY2Iiwic2lnIjoiVHB6M29aTnJweWJ2eEpzMm0ra2FIUWVoWThrPSIsInYiOiIxIn0=?source=newsletter&item=read-text&region=digest&channel=tech-and-telecom-law" target="_blank">controversial</a> because of its potential to limit access to platforms by vulnerable groups and immigrants without lawful status. The law has <a href="https://news.bloomberglaw.com/product/blaw/bloomberglawnews/exp/eyJpZCI6IjAwMDAwMThmLWUwZDgtZGExOC1hYjlmLWZkZmM5OTZmMDAwMSIsImN0eHQiOiJURU5XIiwidXVpZCI6ImFxdjNQaUI5eGZGY0orU0JwV3RHYUE9PWRhR2tub3hFc0ptTmRGMzhTSm15Unc9PSIsInRpbWUiOiIxNzE3NTg0OTkwNTEzIiwic2lnIjoiR1duT3lOMHJUU1Y4S1RXN1BtbWMzZmZiOWZzPSIsInYiOiIxIn0=?source=newsletter&item=read-text&region=digest&channel=tech-and-telecom-law" target="_blank">already faced significant lobbying opposition</a>, leading lawmakers to update the initial bill to (i) require the attorney general rather than platforms to make rules on age verification, and (ii) remove the private right of action in the initial bill in favor of limiting enforcement to the attorney general.California. California’s <a href="https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB976" target="_blank">SB-976</a> (the Protecting Our Kids from Social Media Addiction Act) is <a href="https://news.bloomberglaw.com/product/blaw/bloomberglawnews/exp/eyJpZCI6IjAwMDAwMTkwLTViYjItZDNjYi1hOWZiLWRiZjI5OGVjMDAwMSIsImN0eHQiOiJURU5XIiwidXVpZCI6ImpwTk9oYjJPQjhvN0xPMWd1cW5sNnc9PUtlV2VzdDFaWHE3WmdQdlRnNFRtQXc9PSIsInRpbWUiOiIxNzE5OTE5MzIzMDk3Iiwic2lnIjoicyt6VjRtalJQZmVlLzVXVVRZL1llWW5Ka0JjPSIsInYiOiIxIn0=?source=newsletter&item=read-text&region=top%20stories%20digest&channel=tech-and-telecom-law" target="_blank">facing opposition</a> from tech industry lobbying groups. The law allows parents to control notifications and whether children can access an algorithmic feed as opposed to a chronological feed, and requires rules for age verification. Opponents argue that LGBTQ+ teenagers would be restricted from connecting with others in their community if parental consent is required. Critics also argue that the law is invasive, citing potential infringement on free speech protections and privacy concerns related to age verification. State lawmakers have already updated the law to attempt to remedy some of these concerns.Despite the roadblocks faced by states in pushing forward these laws, movement in this area persists and social media laws focused on minors continue to move through the lawmaking process. We will continue to monitor new laws in this area and the increasing efforts to oppose them.

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Associate

Lindsay is an associate in the Technology Transactions Group of Morrison Foerster.

Lindsay B. Harris

Lindsay Harris

A few months ago, we highlighted the many pending and enacted state-level social media laws targeting minors’ use of social media. Since then, political and industry groups have begun to push back, calling into question whether these types of social media laws will ultimately be successfully implemented.

State Social Media Laws Targeted at Teens Face Opposition

On May 9, 2024, in <a href="https://casetext.com/case/x-corp-v-bright-data-ltd-1" target="_blank">X Corp. v. Bright Data Ltd</a>., the U.S. District Court for the Northern District of California dismissed X’s claims alleging that Bright Data’s access to X’s systems, and scraping and selling of publicly available data from X’s platform, violated its Terms of Service and other policies. Bright Data’s business involves various data scraping products and services, such as scraping data on behalf of its customers, selling tools that enable customer to scrape data, and providing IP proxies for customers to use when scraping data.As an initial matter, the court divided its analysis in two, first looking at X’s claims based on Bright Data’s improper access to X’s systems and then at X’s claims based on Bright Data’s scraping and selling of X’s data. The court easily dismissed the claims based on improper access to X’s systems, including claims for trespass to chattels, violation of California Section 17200 (prohibiting unlawful, unfair and fraudulent business acts), tortious interference with contract, and breach of contract. There was nothing particularly surprising in the court’s analysis of these claims, since the dismissals primarily resulted from X’s failure to plead adequate damages arising from Bright Data’s allegedly improper access.The more interesting aspect of Bright Data came next, where the court considered X’s claim that Bright Data’s scraping and selling of data violated X’s Terms of Service and held that X’s claims were preempted by federal copyright law.Section 301(a) of the Copyright Act states that federal copyright law preempts state-law claims when a plaintiff’s work “come[s] within the subject matter of copyright” and state law grants “legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright.” The court in Bright Data noted that there are two types of copyright preemption: (i) express preemption with respect to state law rights that are “equivalent” to federal copyright rights, and (ii) conflict preemption, where enforcement of the state law would more generally undermine the purpose of federal copyright law. The court in Bright Data focused on this second type of preemption.Under X’s Terms of Service, users retain ownership of the images, text, and other content that they upload to the X platform, and grant X a broad, non-exclusive, royalty-free license to display users’ content on the X platform and to use that content in various other ways, including by disseminating the user content through X’s paid tools. The Terms of Service also prohibit scraping and selling any content from the X platform.As a first step in its preemption analysis, the court notes that, under the Terms of Service, X does not own the user content that Bright Data scraped and sold, and X merely has a non-exclusive license to use the content. Under federal copyright law, a non-exclusive licensee is permitted to use the licensed works within the scope of the license, but has no right to enforce the copyright in, or exclude others from using, the works. Despite this, the claims that X asserted in Bright Data sought to enforce contractual terms that would give X the ability to exclude others from using the content in a manner that would otherwise be available only to the owner (or, possibly, the exclusive licensee) of the copyright in the content, not to a mere non-exclusive licensee.(As an aside, the court speculates that the reason that X does not require users to assign ownership of their content to X, or grant X an exclusive license to use content, under its Terms of Service is because this would impact X’s ability to claim the benefit of the safe harbors under Section 512(a) of the Digital Millenium Copyright Act and Section 230 of the Communications Decency Act, two federal statutes that protect website operators from liability arising from content posted by users. The court notes: “X Corp. wants it both ways: to keep its safe harbors yet exercise a copyright owner’s right to exclude, wresting fees from those who wish to extract and copy X users’ content.” In fact, it is not necessarily true that the availability of these statutory safe harbors turns on whether the website operator holds title (or an exclusive license) to the user content at issue. The more likely reason that X does not claim ownership of user content is that doing so would be viewed as overreach and result in significant backlash among its users. But as this issue is not central to the copyright preemption analysis, we leave it for another day.)The court then goes on to hold that X’s claim that Bright Data breached the Terms of Service by scraping and selling user content is preempted by federal copyright law in three ways, namely that enforcement of X’s contractual rights would:<ol class="li-text-orange"><ol class="li-text-orange"><ol class="li-text-orange"><li>Interfere with copyright owners’ exclusive rights and frustrate federal copyright law, since allowing X to enforce its Terms of Service would give it, a non-exclusive licensee, the ability to exclude others from exercising those rights;</li><li class="li-text-orange">Frustrate the operation of fair use, which would (absent a contract preventing it) allow use of the user content for certain permitted purposes (note that, as <a href="https://blog.ericgoldman.org/archives/2024/05/x-corp-v-bright-data-is-the-decision-weve-been-waiting-for-guest-blog-post.htm">observed</a> by guest blogger Guy Rub in Eric Goldman’s blog, the court seems to treat fair use as something akin to an affirmative right, rather than as the affirmative defense to an infringement claim that it actually is); and</li><li>Restrict use of type of information that Congress intended to keep free from restraint, namely uncopyrightable items such as likes, user names, short comments, etc. (It is not entirely clear how this can form a basis for preemption given that these items fall outside the scope of copyright law … but we digress.)</li></ol></ol></ol>Overall, the court presents an interesting new addition to web scraping law, one not addressed in a case that the court still found six occasions to cite, <a href="https://law.justia.com/cases/federal/appellate-courts/ca9/17-16783/17-16783-2019-09-09.html" target="_blank">hiQ Labs, Inc. v. LinkedIn Corp</a>. (see one of our <a href="https://www.sociallyawareblog.com/topics/ninth-circuits-linkedin-decision-does-not-greenlight-the-unauthorized-web-scraping-of-public-websites" target="_blank">previous articles</a> on that case). In light of Bright Data, website operators should be aware that contractual prohibitions contained in terms of service may not be effective to prevent scraping of user content that they make publicly available.

California Federal Court Holds X’s Claims Against Scraper Preempted by Federal Law