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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Partner

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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Big Data Can Lead to Big Legal Problems For Companies

Big Data Can Lead to Big Legal Problems For Companies | Socially Aware

Mary Race

Deluged with an unprecedented amount of information available for analysis, companies in just about every industry are discovering increasingly sophisticated ways to make market observations, predictions and evaluations. Big Data can help companies make decisions ranging from which candidates to hire to which consumers should receive a special promotional offer. As a powerful tool for social good, Big Data can bring new opportunities for advancement to underserved populations, increase productivity and make markets more efficient.But if it’s not handled with care, Big Data has the potential to turn into a big problem. Increasingly, regulators like the Federal Trade Commission (FTC) are cautioning that the use of Big Data might perpetuate and even amplify societal biases by screening out certain groups from opportunities for employment, credit or other forms of advancement. To achieve the full potential of Big Data, and mitigate the risks, it is important to address the potential for “disparate impact.”Disparate impact is a well-established legal theory under which companies can be held liable for discrimination for what might seem like neutral business practices, such as methods of screening candidates or consumers. If these practices have a disproportionate adverse impact on individuals based on race, age, gender or other protected characteristics, a company may find itself liable for unlawful discrimination even if it had no idea that its practices were discriminatory. In cases involving disparate impact, plaintiffs do not have to show that a defendant company intended to discriminate—just that its policies or actions had the discriminatory effect of excluding protected classes of people from key opportunities.As the era of Big Data progresses, companies could expose themselves to discrimination claims if they are not on high alert for Big Data’s potential pitfalls. More than ever, now is the time for companies to adopt a more rigorous and thoughtful approach to data.Consider a simple hypothetical: Based on internal research showing that employees who live closer to work stay at the company longer, a company formulates a policy to screen potential employees by their zip code. If the effect of the policy disproportionately excludes classes of people based on, say, their race—and if there is not another means to achieve the same goal with a smaller disparate impact—that policy might trigger claims of discrimination.Making matters more complex, companies have to be increasingly aware of the implications of using data they buy from third parties. A company that buys data to verify the creditworthiness of consumers, for example, might be held liable if it uses the data in a way that has a disparate impact on protected classes of people.Expanding Uses of Disparate ImpactFor decades, disparate-impact theories have been used to challenge policies that excluded classes of people in high-stakes areas such as employment and credit. The Supreme Court embraced the theory for the first time in a 1971 employment case called <a href="http://www.naacpldf.org/case/griggs-v-duke-power-co" target="_blank" rel="noopener">Griggs v. Duke Power Co.</a>, which challenged the company’s requirement that workers pass intelligence tests and have high school diplomas. The court found that the requirement violated Title VII of the Civil Rights Act of 1964 because it effectively excluded African-Americans and there was not a genuine business need for it. In addition, courts have allowed the disparate-impact theory in cases brought under the Americans with Disabilities Act and the Age Discrimination in Employment Act.The theory is actively litigated today and has been expanding into new areas. Last year, for example, the Supreme Court held that claims using the disparate-impact theory can be brought under the Fair Housing Act.In recent years, the FTC has brought several actions under the disparate-impact theory to address inequities in the consumer-credit markets. In 2008, for example, the agency challenged the policies of a home-mortgage lender, Gateway Funding Diversified Mortgage Services, which gave its loan officers autonomy to charge applicants discretionary overages. The policy, according to the FTC, had a disparate impact on African-American and Hispanic applicants, who were charged higher overages than whites, in violation of the Federal Trade Commission Act and the Equal Credit Opportunity Act.The Good and Bad Impact of Big DataAs the amount of data about individuals continues to increase exponentially, and companies continue to find new ways to use that data, regulators suggest that more claims of disparate impact could arise. In a report issued in January, the FTC expressed concerns about how data is collected and used. Specifically, it warned companies to consider the representativeness of their data and the hidden biases in their data sets and algorithms.Similarly, the White House has also shown concern about Big Data’s use. In a report issued last year on Big Data and its impact on differential pricing—the practice of selling the same product to different customers at different prices—President Barack Obama’s Council of Economic Advisers warned: “Big Data could lead to disparate impacts by providing sellers with more variables to choose from, some of which will be correlated with membership in a protected class.”Meanwhile, the European Union’s Article 29 Data Protection Working Party has cautioned that Big Data practices raise important social, legal and ethical questions related to the protection of individual rights.To be sure, government officials also acknowledge the benefits that Big Data can bring. The FTC in its report noted that companies have used data to bring more credit opportunities to low-income people, to make workforces more diverse and provide specialized health care to underserved communities.And in its report, the Council of Economic Advisers acknowledged that Big Data “provides new tools for detecting problems, both before and perhaps after a discriminatory algorithm is used on real consumers.”Indeed, in the FTC’s action brought against the mortgage lending company Gateway Funding Diversified Mortgage Services, the agency said the company had failed to “review, monitor, examine or analyze the loan prices, including overages, charged to African-American and Hispanic applicants compared to non-Hispanic white applicants.” In other words, Big Data could have helped the company spot the problem.Policy Balancing ActThe policy challenge of Big Data, as many see it, is to root out discriminatory effects without discouraging companies from innovating and finding new and better ways to provide services and make smarter decisions about their business.Regulators will have to decide which Big Data practices they consider to be harmful. There will inevitably be some gray areas. In its report, the FTC suggested advertising by lenders could be one example. It noted that a credit offer targeted at a specific community that is open to all will not likely trigger violations of the law. But it also observed that advertising campaigns can affect lending patterns, and the Department of Justice in the past has cited a creditor’s advertising choices as evidence of discrimination. As a result, the FTC advised lenders to “proceed with caution.”As the era of Big Data gets under way, it’s not bad advice for all companies.*    *    *This post <a href="http://www.marketwatch.com/story/big-data-can-lead-to-big-legal-problems-for-companies-2016-06-01" target="_blank" rel="noopener">originally appeared</a> as an op-ed piece in <a href="http://www.marketwatch.com/" target="_blank" rel="noopener">MarketWatch</a>.For more on potential legal issues raised by Big Data usage, please see our <a href="http://www.sociallyawareblog.com/" target="_blank" rel="noopener">Socially Aware</a> post, <a href="http://www.sociallyawareblog.com/2016/01/13/big-data-big-challenges-ftc-report-warns-of-potential-discriminatory-effects-of-big-data/" target="_blank" rel="noopener">Big Data, Big Challenges: FTC Report Warns of Potential Discriminatory Effects of Big Data</a>.