Facebook Reverses Decision and Announces Temporary Return to Prior Terms and Conditions

0 Comments Written by on February 18, 2009 | Posted in Content Licensing

Following up on our blog posting yesterday regarding the recent controversy over a Facebook decision to amend its terms and conditions, Facebook has decided to reverse its previous decision and temporarily adopt its previous terms and conditions.

Facebook CEO Mark Zuckerberg announced the change of policy late last night, stating as follows:

Many of us at Facebook spent most of today discussing how best to move forward. One approach would have been to quickly amend the new terms with new language to clarify our positions further. Another approach was simply to revert to our old terms while we begin working on our next version. . . .

Going forward, we’ve decided to take a new approach towards developing our terms. We concluded that returning to our previous terms was the right thing for now. . . . Our terms aren’t just a document that protect our rights; it’s the governing document for how the service is used by everyone across the world. Given its importance, we need to make sure the terms reflect the principles and values of the people using the service.

Our next version will be a substantial revision from where we are now. . . . Facebook users will have a lot of input in crafting these terms. . . .we’ve changed the terms back to what existed before the February 4th change, which was what most people asked us for and was the recommendation of the outside experts we consulted.

Clearly, the large public relations controversy forced Facebook to reconsider its decision to amend its terms and conditions. In the end, Facebook apparently felt that it had no choice but to listen to its customer base and respond to the controversy by returning to its prior terms and conditions.

As I indicated in my prior blog posting, this is a good example of a situation where a company has had to separate out its legal interests from its business interests. While overly broad licensing language such as what Facebook adopted may have been in its best legal interests, in that it offered the company the most protection with respect to user content, clearly the adoption of such language was not in its best business interest due to the public relations outcry it created. Although terms and conditions are typically drafted to allow the company to unilaterally modify them at any time, the fact that a company can unilaterally modify them does not mean that the company should always make such modifications. Clearly, the legal risks posed to the company by the old language were determined ultimately to be less than the business risks to the company from not putting a prompt end to the public relations controversy.

This incident should provide a good lesson to lawyers and businesses relying on legal advice: legal decisions–particularly when it comes to contracts–should not be made in a vacuum. The business consequences of legal decisions always need to be considered in parallel. It does not do much good to protect your company against all possible risks if your company is protected to such a degree that it is unable to operate.

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