Friday, 12 February 2016

Market power (Facebook and the French)

There is a rather odd article on the French deciding that Facebook contracts cannot be under California law and have to be under French law.

I have to say that I am a tad conflicted on this point.

The contract is clear and offers, for no fee, a service to anyone that wants it if they AGREE to be bound under California law for that contract. Why the hell should the French or anyone feel that is unreasonable. It is a free service, and offered freely for anyone to take or not take. If someone does not like being bound by California law, simply do not take the service.

The specific case, which is not yet decided, is over Facebook removing an image that breached their decency terms. But Facebook is their web site, why the fuck should they not have final say on what is on that web site. It is not like the "customer" paid them to display that post and they broke that contract. In fact, the "customer" broken the contract by posting the image.

Now, I wonder how it will play out in French courts. I hope there is some sanity that the customer in this case did breach the terms, even under French law, and that Facebook are entitled to control what is on *THEIR* web site. We'll see.

The whole thing does raise a lot of issues though.

Choosing jurisdiction is one - it is not unusual for a contract to define the jurisdiction and ultimately it only makes sense if that is defined as one place, and so one party to the contract defines it. Ultimately if the other party is not happy then they should not enter in to that contract.

The problem is "consumers are assumed to be stupid" and so, even if they agreed something, then maybe they should be protected from having done so. The solution, in my opinion, is more education, not stitching up companies when consumers are muppets. But that is just my view. I want consumers to make good, informed, choices.

But I wonder if this ruling has other problems. Is simply accessing one of my web sites that provides some useful "service" for free, something which has some implied "contract"? I have some useful sites like http://find.me.uk/ for example. I do not try to impose any contract and hence any jurisdiction on disputes over contract. But is there one, implied. And is it one that could be deemed under the law of some foreign country which has some Draconian rules and could apply some penalty if the site is down for a day? How can I tell.

Now, for my site, it may be better if I have a note stating it is a non-contractual arrangement. Such things are possible, and avoid any issue of jurisdiction as no contract disputes can exist. Maybe Facebook should try that.

Though I suspect for Facebook this will simply mean they have some French compatible contract terms drawn up under French law, and then they are covered.

Even so, this does raise other issues - at some point an organisation like Facebook or Google or Twitter reach a level globally and/or even within one country when maybe the usual rules need to stop applying. The "don't agree to Facebook terms" option stops being sensible when one would fall out of all social circles by doing so. At that point, maybe new rules need to apply somehow. It is, perhaps, the price of success.

P.S. I am told that one can have a contract under one countries governing law, and another countries jurisdiction, just to add to the fun. Thanks Neil.

24 comments:

  1. Conversely, if someone runs a site using a French domain (facebook.fr redirects to https://fr-fr.facebook.com), in the French language, targeted at France, with a company in the country (Facebook France, with registered office in Paris) why should a French user be deprived of local consumer protection laws?

    ReplyDelete
    Replies
    1. I know what you are saying, but ultimately if the contract states, and the other party agrees, the jurisdiction of the contract - why should that not be valid? It comes down to how stupid are consumers allowed to be?

      Delete
    2. I agree: an express contractual agreement should only be overridden in very limited circumstances. Whether this is one of those circumstances, I don't know, but it seems an odd consumer protection right to apply, IMHO.

      Delete
    3. My worry here is that a lot of these sites are major communication nexi. Would it be acceptable to state that if you wanted to use the phone system, that any disputes with the phone company required an initial outlay of many thousands to get to somewhere on the other side of the world, while the company could get there for next to nothing, and that the applicable legal code was one you almost certainly knew nothing about? Of course not. So why is it acceptable for Facebook (for many people, at *least* as crucial a communication system as the phone network) to say the same thing?

      If anything, I'd say that the only parties who should be permitted to state a choice of jurisdiction is private individuals. As it is, only companies ever do it. It might be worth considering why that is.

      Delete
    4. We sell UK VoIP numbers - by that argument we could not do so under English law if the customer happened to be in another country. That would make it non viable to sell the service to anyone outside UK. We'd have to have terms you agree to saying you are based in UK, which is just as enforceable I expect as having terms saying it is under English law. What if someone with a VoIP number moves, must we cut him off. Sorry but in my view as long as the contract is clear it seems odd that one should not be able to offer a contract on terms that dictate jurisdiction.

      Delete
    5. It is probably reasonable to say that the choice of jurisdiction cannot vary over the lifetime of a contract, which would solve the problem you describe. (And, again, if it's nonviable to sell a product to someone because you can't afford to defend yourself if there is a legal problem, why is it somehow considered acceptable to land the individual to whom you're selling it with the exact same cost but in reverse? It seems unlikely that the company has fewer resources than the individual!)

      Delete
    6. Sorry but that is simple - if it is non viable, do not take the contract. You have a choice to enter a contract. You do not have to do so if you are not happy with the terms.

      Delete
    7. A valid point about "Facebook France", in French on .fr. There's also an argument about equality of arms: if I want to sue Tesco for, say, a mouldy jar of cranberry sauce I bought up here in Scotland, should they be allowed to insist on the case being down in England and under English law because that's near their HQ?

      Indeed, specifically enumerated in the official guidance on the Unfair Terms in Consumer Contracts
      Regulations 1999: "Consumers should not be prevented from starting legal proceedings in their local courts – for example, by a term requiring resort to the courts of England and Wales despite the fact that the contract is being used in another part of the UK having its own laws and courts."

      If Tesco - or indeed A&A - don't want to answer to Scottish courts, don't provide services in Scotland!

      (Yes, it's harder with online-only services; with Paypal, you might not even *know* their location, just an email address - but when there's a physical location involved, much harder to argue.)

      Delete
    8. The problem with "if you don't like it, don't take the contract" is there is often no alternative. Contracts should be a negotiation between two parties, but contracts between a company and a consumer rarely are. If you want to access Facebook, you are required to accept the Facebook contract, whether or not you agree with all the terms - there is no scope for coming to a reasonable negotiation with them and there is no other way to access Facebook. Sure, other social networks exist, but they don't have your friends on them, so saying that you should reject FB's contract and use a different service is a bogus argument.

      Delete
    9. Oh, I quite understand, and if there are to be rules on such things, how are they decided. Clearly company forced to offer service to people that will not agree their terms is, in general, a very bad idea. Technically Facebook is not a monopoly as other social media services exist and anyone is free to start one and compete. But at some point, in some way, some control over such things seems sensible - but where and how?

      Delete
    10. Facebook may not be a monopoly, but it is most likely dominant, in my view, and organisations with dominant positions have special obligations in terms of their behaviour. The point about network effect is very pertinent here.

      Delete
  2. Slightly different focus, but take a look at the Pammer case (especially paragraphs 83 & 84):

    http://curia.europa.eu/juris/document/document.jsf;jsessionid=9ea7d2dc30d58ef8430243e94fe08d7483793c4452c0.e34KaxiLc3qMb40Rch0SaxuSbh10?text=&docid=83437&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=10552

    ReplyDelete
    Replies
    1. Basically, the more helpful you are (language, currency) the worse off you may be in disputes. Good system that!

      Delete
    2. Perverse incentives for sure.

      Our firm's website, for example, uses a .com TLD and I habitually use +44 before a phone number, so that it is easy for someone to add to a phone book and dial internationally. But it's a calculated risk.

      Delete
    3. In some ways I am pleased I sell such a UK-centric service for the most part.

      Delete
    4. Because that's stopped you getting embroiled in litigation a flight away? ;)

      Delete
  3. What contract? Assuming we're talking about a normal user using the website then a) what's the consideration and b) where's the intent to create legal relations on the part of the user?

    ReplyDelete
    Replies
    1. I suspect the consideration is allowing them to do things with your personal information which would not otherwise be allowed. The intent to create legal reations will be that Facebook ask you to formal terms and conditions.

      Delete
    2. Consideration: the exchange of promises, as set out in the user agreement. Facebook agrees to make its service available to you for the time being, you agree to permit Facebook to use your data for advertising purposes.

      Intention to create legal relations: otherwise than in a purely domestic situation, the courts will tend to deem this unless there is evidence that this is not appropriate in the particular case. Since Facebook's user agreement is a formal document, to which a registrant must click "accept" or "agree" or similar, I think you'd have a hard time arguing that there was no intention here.

      Delete
  4. I find it "entertaining" that a French court seems to be impling that Facebook cannot take user uploaded content down without the users permission - on thr same day as the British press is having a go at the same Facebook for NOT taking down images of kids (es, some Saville type images - which FB have taken down -but others just, according to the press, being "kids modelling underwear from catalogues"...).

    ReplyDelete
    Replies
    1. You mean screenshots from the Daily Mail Online? (Newspaper screaming about this particularly loudly: the Daily Mail. Whoopsy.)

      Delete
    2. Was the BBC actually - http://www.bbc.co.uk/news/uk-35521068 ;)

      Delete
  5. I got a kind of opposite case with Amazon flaring up. Condition of sales on Amazon.co.uk clearly state that any sales contract you have is with Amazon SaRL in Luxembourg and under Luxembourd law and courts, but that as a customer under European Law you can ASK for it to be transferred/examined by UK court. Which is obviously what Amazon wants/expect you to do as the Luxembourg entity is an empty shell tax operation (virtually run form a garden shed).
    Being French speaker and more comfortable to plead my cause in front of a Luxemburgish court, I keep denying their insistence to exercises my right to get it taken into UK.
    The issue is they accepted my order for wine, send me a shipping confirmation (which according to their condition of sales is the point at which it becomes a sales contract and binding), the carrier broke/lost it so Amazon decided to unilaterally cancel my order and reimburse me, when I'm entitled to have them executing their part of the contract.
    So obviously having to hire a French speaking lawyer in Luxembourg is annoying them, especially as they got no chance of winning.... all that because "we can't recreate the order in the system". Can't wait to see the judge face with "It's the law but our software can't handle it".

    ReplyDelete
    Replies
    1. I had a similar (computer says no) problem with LoveFilm a few years ago. I reduced my subscription level from a "3 DVD at a time" package to a "pay as you go" package, and the change was supposed to automatically take effect when I returned the DVDs I currently had on loan. So I returned the DVDs as requested and they just sent out 3 more (i.e. they didn't change my subscription level). This kept happening (over a period of about 4 months) and I informed them in writing that I didn't authorise them to continue charging my debit card. Each time I complained they told me their computer system wouldn't let them alter my subscription until the DVDs had been returned, and each time I returned them they failed to update my subscription and therefore continued to charge my card.

      Anyway, they insisted that it wasn't fraud because their computer systems wouldn't allow them to comply with the law. In the end I asked the bank to issue a chargeback, which they did, and I've avoided LoveFilm like the plague ever since.

      So there you have it, apparently if you want to break the law you should just ensure that you design your computer systems to force your hand. :)

      Delete