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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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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Snapchat’s recent settlement with the Federal Trade Commission (FTC) generally provides a comprehensive but not groundbreaking roadmap to the FTC’s privacy and 

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Snap Judgment: FTC Alleges Snapchat Did Not Keep Its Privacy and Security Promises, But Suggests Broad New Duty in the Process

Snap Judgment: FTC Alleges Snapchat Did Not Keep Its Privacy and Security Promises, But Suggests Broad New Duty in the Process | Socially Aware

Snapchat’s recent settlement with the Federal Trade Commission (FTC) generally provides a comprehensive but not groundbreaking roadmap to the FTC’s privacy and data security expectations in the mobile environment under Section 5 of the FTC Act, with two very notable exceptions:<ol><li>It now appears that companies are required to follow researchers’ blogs and other writings to see if there are any privacy or data security vulnerabilities, and to act on any such information promptly; and</li><li>It also appears that the FTC expects companies to be aware of all third parties who have technology that can interact with an app, and to make sure that when consumers engage in any such interaction, all of the company’s privacy and data security representations remain true. If the FTC continues down this path, it will create unsustainable new burdens on app developers, many of which have very few resources to begin with. Furthermore, if this is the new standard, there is no reason it should be limited to the app environment—analytically, this would lead to a rule of general application.</li></ol>THE BASIC ALLEGED MISREPRESENTATIONThe Snapchat app became very popular because of its branding as an “ephemeral” mobile messaging service. Among other things, the app promised its users and prominently represented—in its privacy policy and an FAQ, among other places—that the “snaps” (e.g., messages) users sent would “disappea[r] forever” after 10 seconds (or less). However, according to the FTC’s <a href="http://www.ftc.gov/system/files/documents/cases/140508snapchatcmpt.pdf">complaint</a>, in addition to other problems with the app’s privacy and security features, it was much too easy to capture these supposedly ephemeral messages, making the company’s claims false and misleading in violation of Section 5. And since the company’s representations were not consistent with the app’s practices, now it’s the FTC that won’t be disappearing any time soon.A NEW DUTY TO DISCOVER POSSIBLE VULNERABILITIESGiven the app’s popularity, along with its unqualified claims (“snaps disappear . . .”), maybe it shouldn’t be surprising that creative users and other opportunistic individuals found ways to preserve these supposedly fleeting messages. As the FTC complaint put it, “several methods exist by which a recipient can use tools outside of the application to view and save snaps indefinitely.” The FTC noted in particular “widely publicized” methods for saving video files sent through Snapchat and for using smartphones’ “screenshot” functionality to capture a snap. With regard to the screenshot work-around, Snapchat also represented that the app would “let you [the sender] know if [recipients] take a screenshot.” But this representation was allegedly misleading because of the well-known means for circumventing the app’s alert mechanism.But the FTC also seems to have collapsed a subtly different type of problem with the app into the discussion of these allegedly “widely publicized,” albeit ad hoc, means to preserve supposedly ephemeral snaps. As the complaint (and <a href="http://www.ftc.gov/news-events/press-releases/2014/05/snapchat-settles-ftc-charges-promises-disappearing-messages-were">press release</a>) put it, a “security researcher” warned the company in 2012 that the way its application programming interface (API) functioned made it possible for third-party apps to download and save photo and video messages sent through the Snapchat service, since the deletion function was wholly dependent on the Snapchat application itself.The fact that this “warning” to Snapchat—note that the complaint does not say if or how Snapchat actually received or learned about this warning, if at all, or that the warning was “widely publicized”—evidently should have been sufficient to put the company on notice that its app had a vulnerability suggests that the FTC may be trying to create a very broad “duty to discover” potential privacy or security vulnerabilities. It’s one thing for this type of flaw to lead to a misrepresentation based on the ephemeral nature of the snaps (since Section 5 is a strict liability statute, and Snapchat’s representations allegedly were facially misleading), but it’s quite unprecedented for the FTC to suggest a duty to be aware of (and therefore respond to) the warnings of “security researcher[s],” especially if those warnings are not “widely publicized.”There is, of course, no guidance in the Snapchat settlement about which researchers companies are supposed to pay attention to, or which warnings they must quickly heed. Evidently, the FTC thinks that Section 5 requires app developers to proactively monitor the online community for possible security vulnerabilities. There is no analytical reason to limit this new expectation to app developers. As a result, the FTC risks creating considerable compliance costs for all kinds of companies, and not just mobile app companies.ADDITIONAL SECTION 5 VIOLATIONS – A CHECKLIST FOR MOBILE APP COMPLIANCEGeolocation. The complaint also alleges that the company deceived users about the amount of personal data it collected, and about the security measures in place to protect that data. Until February 2013, Snapchat’s privacy policy claimed that the app did not ask for, track, or access any location-specific information from users’ devices at any time. However, according to the FTC, Snapchat integrated a third-party analytics tracking service in October 2012 that collected users’ WiFi-based and cell-based location information from the app.Accessing contacts. The privacy policy further claimed that the app only collected users’ email, phone number, and Facebook ID for its “Find Friends” feature, which is a way to find other users of the app. But Snapchat collected the names and phone numbers of all contacts in the users’ mobile device address book who utilized the Find Friends feature.Reasonable security. The last count of the complaint alleges that the company failed to secure the Find Friends feature, both by: failing to verify that the phone number that a user entered did, in fact, belong to the mobile device being used by that individual; and by failing to implement restrictions on the number of Find Friend requests that any one account could make. Hackers were allegedly able to exploit flaws in the app’s security to access 4.6 million Snapchat usernames and phone numbers. In light of these vulnerabilities, the FTC alleged that the company’s representations about how it secures users’ data (e.g., “Snapchat takes reasonable steps to help protect your personal information”) were false and misleading as well.Privacy by design. As the FTC has made clear, developers must implement privacy-by-design by building privacy and security into the app’s structure from the outset. A privacy-by-design program should address privacy risks, protect the privacy and confidentiality of personal information, and provide policies and procedures sufficient to cover the nature and scope of the app and the sensitivity of the information collected.* * *The FTC’s allegations in the Snapchat complaint epitomize the FTC’s ongoing and broadening efforts to ensure that companies market their apps truthfully and protect user information. For an app to be in compliance with Section 5, it is clear that: (1) consumer controls must work for every consumer, every time, under all conditions and use cases, even ones that the developer is unaware of; (2) collection of information from users’ address books requires clear disclosure and an opt-out preference; and (3) representations about “reasonable” security create specific legal obligations to protect user data, just as representations about privacy create legal obligations to use information in a manner consistent with those representations.But given the way that the Snapchat app interacted with third-party apps, and the FTC’s allegations relating to those interactions, the Snapchat settlement also suggests that: (1) app developers need to pay attention to privacy and data-security bloggers, and promptly remedy bugs found by these third parties; and (2) representations about which data is or is not collected by an app must extend to third-party tools that can use information generated by the users of that app.CONCLUSIONThough in many ways the FTC’s complaint and consent order are similar to those the FTC has issued recently, the settlement is significant because of its breadth.The Snapchat app itself illustrates current expectations of consumer controls, as well as the notion of privacy as a marketable concept in its own right. The app’s popularity was driven by the idea of privacy itself as a desirable commodity. But, according to the FTC, the app couldn’t deliver on its unqualified promises, and that made it a fairly easy target for the FTC.As more app developers offer consumers privacy options, they need to be certain that they can live up to the promises they make, for every user, every time, under all conditions and use cases; follow researchers’ “warnings”; and understand all use cases continuously, because the FTC’s interest in mobile applications is not ephemeral.