The evolution of social media in business from “occasional accessory” to “integral component” has in turn forced the law itself to evolve in an attempt to address social media’s increasing relevance. Recent developments in two different areas of law show a newly evidenced recognition of social media’s importance in business.
Today, Pillsbury attorneys Joseph Tiffany and Connie Wolfe published their client alert titled Seventh Circuit Finds Article III Standing for Data Breach Class Action Based on Allegations of Future Harm. The Alert notes that, in the wake of numerous data breach cases dismissed for lack of Article III standing based on the Supreme Court’s decision in Clapper v. Amnesty Int’l USA, the Seventh Circuit Court of Appeals has become the first post-Clapper appellate court to hold that data breach victims adequately alleged standing based on risks of future harm. In Remijas v. Neiman Marcus Group, LLC, the district court dismissed a class action complaint against retailer Neiman Marcus based on the plaintiffs’ lack of Article III standing. Plaintiffs appealed, and the Seventh Circuit reversed. The decision adds a new element of uncertainty for custodians of customer data impacted by data breaches.
A recent massive data hack of an online dating site, Ashley Madison, once again proves that what one publishes, says, or does online, even in seemingly private forums, is never completely private. It’s also a reminder that the legal recourse available in less traditional data breaches can be severely curtailed by what can be a formidable obstacle: a company’s Terms of Service.
In late July, we posted our client alert titled FCC Expands Reach of Telephone Consumer Protection Act. The Alert discusses the FCC’s July 10, 2015 long-awaited omnibus Declaratory Ruling and Order. The Ruling focuses largely on providing guidance, particularly for new and emerging technologies, regarding what an automated telephone dialing system (aka ATDS or autodialer) is and when consent to use one to place a call or send a text message is required under the Telephone Consumer Protection Act and its implementing regulation, 47 C.F.R. § 64.1200. All businesses should immediately reevaluate their calling and text messaging practices to ensure compliance with the new Ruling, as it is likely to escalate the continued upward trend in TCPA class action filings.
In a recent lawsuit, Uber Technologies Inc. is accused of violating California’s Unfair Competition Law. Specifically, the complaint alleges that Uber misleads its users by: (1) falsely advertising its services as cheaper than a typical cab company for specific routes when its services can actually be more expensive during certain peak times, and (2) presenting offers for free ride credits in exchange for referring business without notification prior to the users making the referral that the free ride credits will expire. Although the allegations in the lawsuit do not mention Uber’s terms of service, the facts alleged in the lawsuit highlight the importance of having comprehensive terms of service.
To give a little context, terms of service (also known as “terms of use” or “terms and conditions”) are rules which a user of a service must acknowledge and agree to abide by to use the service. In many instances, a company can successfully obtain early dismissal of a lawsuit by relying on its terms of service. For example, if a lawsuit is brought against a company for misleading users solely on the grounds of allegedly failing to give notice of certain limitations, but those limits are clearly set forth in the company’s terms of service (and do not violate federal or local laws or regulations), the lawsuit may usually be dismissed very early in litigation.
As of the date of the writing of this post, for instance, Starbucks’ terms and conditions for its reward program spell out the expiration period for its “free drink or food item” rewards that are credited to a user’s account after certain requirements are satisfied. Prior to becoming an authorized user of the reward program, the user must agree to the expiration period set forth in Starbucks’ terms and conditions for the rewards.
Uber users similarly must agree to Uber’s terms of service prior to becoming an authorized user of its service. As of the date of the writing of this article, however, Uber’s terms of service do not appear to explicitly describe when and how its rates may change from its advertised rates or when free ride credits will expire. While there may be other ways in which Uber can approach the recent lawsuit, it is likely that early dismissal of the lawsuit based on its terms of service may have been possible had it included the foregoing rate and free ride credit terms.
All in all, it’s just another reminder that the going rate for an ounce of prevention remains a pound of cure.
Even freed from bricks and mortar, online retailers and service providers are realizing that market share is not infinite. A complaint recently filed by Angie’s List Inc. against Amazon Local LLC for its newly launched online home services network can be viewed as the inevitable result of what will happen as internet giants eye each other’s customer bases. Angie’s List Inc. provides consumers with online reviews of home improvement service providers (e.g., handymen, gardeners, electricians, etc.) from other consumers in their area. Although competitors have tried to challenge Angie’s List, the platform has remained the dominant player in the industry. The company largely credits the stable of reliable home service professionals it has built over the past twenty years for its market stability.
As social media and the numerous platforms continue their exponential growth in popularity and constant evolvement, legal issues surrounding their use also will inevitably emerge. A recent case filed in the Western District of Michigan is a prime example. In Beer Exchange, LLC v. Bexio, LLC, the plaintiff claims that use of a certain Twitter handle and tags on Instagram by the defendant is causing a likelihood of confusion that amounts to trademark infringement under both federal and state law.
Last Friday, Homejoy—a startup that provided on-demand house cleaners—announced that it will be shutting down at the end of July. In an interview with Re/Code, Homejoy’s CEO attributed its fall to the recent Uber decision, further confirming the belief of many that the Uber decision poses a significant threat to companies in the “sharing economy” that rely on being identified as “technological platforms” that facilitate private transactions between independent service provider partners and consumers to avoid certain laws and regulations. Such identification may, for instance, allow companies to properly classify their service provider partners as independent contractors to mitigate costs of compliance with laws and regulations that govern employer/employee relationships. This article considers a few user-directed features or offerings that could help tip the scale in their favor.
Congratulations to b Spot, a licensed mobile games community that lets adults legally wager and win cash in the US, which has been named a TiE50 Start Up for 2015.
After screening 2,716 companies worldwide, then narrowing down the group to 160, b Spot was named one of the top 50 start-ups at TiEcon Friday in Santa Clara, California. All 50 as a group are considered the Top Start-Ups of 2015.
TiEcon is the world’s largest conference for entrepreneurs. Winners are judged by an expert panel of venture capitalists, angel investors, serial entrepreneurs, CEOs and technology experts.
“After three years of hard work, it’s gratifying for our company to win a TiE50 award and gain this type of meaningful recognition,” said David Marshall, CEO of b Spot, who presented at the conference. “The Company is being recognized for its ingenuity, technical achievements, and its massive market potential.
Past winners of the TiE50 award include:
– Couchbase - Kabam
– Wildfire Interactive (acquired by Google)
– Bump Technologies (acquired by Google)
– mFoundry (acquired by FIS)
– YuMe (now a public company)
“TiE50 has become a global brand that attracts thousands of companies worldwide. We screened 2716 companies this year and announced the most innovative 160 companies as 2015 TiE50 Top Start-ups. This pool of the very best-of-the-breed is again subjected to another round of rigorous judging to pick out the ultimate 50 winners proudly carrying the 2015 TiE50 Winner recognition. A star attraction of the conference is TiE50 presentations. Audiences are treated to amazing ideas and innovative technologies,” said Ram K. Reddy, the program chair.
About TiE – TiE is a global not-for-profit organization fostering entrepreneurship through mentoring, education, and networking. We consider entrepreneurship to be the single most powerful instrument to advance global prosperity. Our greatest strength is our network of over 60 chapters in 17 countries with a worldwide membership exceeding 14,000 that includes successful entrepreneurs, venture capitalists, corporate executives, and aspiring entrepreneurs. For more information on TiE, visit www.tie.org.
A weekly wrap up of interesting news about virtual worlds, virtual goods, and other social media.
Goldman a Lead Investor in Funding Round for Bitcoin Startup Circle
Goldman Sachs part of $50 million round that values Circle Internet at around $200 million.
Hands-on With Microsoft HoloLens: Augmented Reality That Doesn’t Make You Sick
By knowing exactly where you are in your environment, the HoloLens software is able to position objects much more steadily, resulting in a more seamless user experience.
Treasury Penalizes Ripple Labs, in First Action Against Virtual Currency Exchange
Agency says Ripple failed to obtain license and follow anti-money-laundering rules.
Augmented Reality Might Fix Our Posture, Social Lives
“I think it’s a natural evolution that we will all be wearing some lightweight, head-mounted display in the far future,” Daqri VP of business development Brian Selzer said on a panel at the NeuroGaming Conference.
