Facebook's TOS Debacle and Six Lessons for Tech Companies

Facebook’s recent collision with user sentiments over changing its terms of service (TOS) only got as much press as it did because it was so public. But there are lessons to be learned by any tech company that potentially might welcome online interaction with customers – which, these days, seems like virtually all of them. Unfortunately, Facebook wouldn’t make anyone available for an interview, but the lessons are still easy to pick out. All you have to do is follow the columns of smoke from the crashes:

1. Don’t think that the users have ever paid attention to the TOS before.. One of the biggest ironies is that until someone steered The Consumerist to point out the problem, apparently no one had paid much attention, even though the changes in the new working were miniscule.
2. Don’t think that users understand the TOS, even when they do read it. A TOS pretty much falls into the same category as privacy statements: long, complex, and obscure for most people. It doesn’t matter that the bulk of the wording in Facebook’s has virtual duplicates in the TOS you can find for any major online or social networking service. People latch onto a few words here and there and think that the company is out to steal everything it can.
3. In their eyes, people have a reason to be distrustful. The standard answer to user questions is “we need the language to be able to let you post anything,” and that is technically true. But companies could also be honest and say that they need the coverage to be able to sell ads and make money off what people put up, because that is what they are doing. And they could admit that the wording is often so broad that a TOS really would let a company resell what people post. Why not modify the TOS to explicitly say that the wording is intended only to let the company be able to run its social networking system? Could it be that maybe the company wants the option to do something more? Any corporation not explicitly putting limits on its abilities is waiting to become the next Facebook.
4. Listen to the criticism and don’t respond to something else. After the initial blowup, Facebook CEO Mark Zuckerberg posted a message about it. But by emphasizing the question of whether people owned their own information, he showed that he either completely misunderstood the complaint or wanted to talk around it. The question wasn’t about information but about content. People don’t want companies making money by taking their photos or their writing or videos and finding some opportunity without offering anything to the creator. Oh, they realize that the content attracts viewers and helps sell ads, but the possibility of licensing someone’s photo of an adorable kitten to a calendar company is a different story.
5. Online is increasingly complicated. What really angered consumer groups was that Facebook wanted continued rights to content after someone stopped using the service, but kept talking about privacy. However, Facebook had a big and real issue in someone’s “content” being splayed across dozens, or even hundreds, of other people’s profiles as comments. When a user goes away, that is still the person’s copyrighted content. Maybe companies will have to track those interactions more closely and be ready to delete everything relevant when a customer leaves.
6. Screw-ups can get really messy. Not only did Facebook set the groundwork for all that bad PR, but also a formal complaint to the Federal Trade Commission. As much as the company wants to spin itself as sensitive and caring, it seems that the complaint was the real impetus to taking action. And it seems that there are groups ready and loaded with lawyers.

This is an area that companies need to address before that cold, hard rain starts.