Section 230 of the CDA: An Employer’s New Friend?

Posted by on May 19, 2014 in Defamation, Employment and Labor, Social Media

Employees can get carried away on social media. US Airways learned this the hard way when its employee responded to a customer complaint on Twitter with an obscene picture of a woman and a toy jet. An apology and deletion of the tweet followed an hour later (an eternity in cyberspace). US Airways claims its employee made an “honest mistake,” and the incident has not spawned a lawsuit, but one can imagine situations in which the malicious online statements of an employee land the employer in legal trouble.

So what’s an employer to do? Thankfully, employers can find some solace in Section 230 of the federal Communications Decency Act (“CDA”), as a recent Indiana case illustrates. In Miller v. Federal Express Corp., an employee of a non-profit organization, 500 Festival, Inc. (“500 Festival”), and an employee of FedEx separately posted comments on media websites criticizing the plaintiff’s leadership of Junior Achievement of Central Indiana, which he ran from 1994 to 2008. Although the employees posted the comments using aliases, the plaintiff traced the comments back to IP addresses assigned to 500 Festival and FedEx and sued them for defamation.

The Indiana Court of Appeals affirmed the trial court’s dismissal of the defamation claims against 500 Festival and FedEx based on the Section 230 of the CDA. Congress passed Section 230 to protect companies that serve as intermediaries for online speech from liability for harmful content posted by third parties. A defendant claiming Section 230 immunity must show that: (1) it is a provider or user of an interactive computer service; (2) the plaintiff’s claim treats it as the publisher or speaker of information; and (3) another information at issue was provided by another content provider. Satisfying these three elements immunizes the defendant from suit, although the author of the offensive content could still be held liable.

It’s not difficult to see how Section 230 applies where, for instance, the operator of an online discussion forum is sued for defamation based on a comment posted by a forum member. The operator easily qualifies as an “interactive computer service” and can argue it is not liable for content that someone else published. But could a corporate employer qualify for Section 230 immunity? The court in Miller said yes, siding with precedent set by California and Illinois courts. An employer that provides or enables multiple users on a computer network with Internet access qualifies as a provider of an interactive computer service. Since the defamation claims tried to hold 500 Festival and FedEx liable for allegedly publishing statements made by their employees, Section 230 barred the claims.

Controlling what employees say online can be a daunting task, but it’s nice to know that employers have some protection from legal liability for the “honest” (or not so honest) mistakes of employees.

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Oh Snap! Lessons From the Snapchat Settlement With the FTC

Posted by on May 8, 2014 in Advertising and Marketing, Data Security, Privacy

The Federal Trade Commission (FTC) just announced that Snapchat agreed to settle charges that it deceived consumers about how its popular mobile message app worked and what personal user data it collected.  (Read the FTC’s press release here). Part of Snapchat’s appeal was a feature enabling users to control how long a message could be seen by the recipient. After the designated time limit expires, the message is destroyed, much like the mission briefings in Mission Impossible. At least that’s what Snapchat told users. According to the FTC, Snapchat misled consumers because the app didn’t exactly work the way it said it did. The FTC’s complaint against Snapchat (read it here) included these allegations:

  • Recipients of a “snap” (a Snapchat message) could save the snap using tools outside of the app. Snapchat apparently stored video snaps in a location on the recipient’s mobile device outside of the app’s secure “sandbox.” This enabled recipients to find and save video snaps by connecting their mobile device to a computer and using simple file browsing tools. Another way to bypass the deletion feature was to use apps that connected to Snapchat’s API to download and save snaps.
  • Snapchat told users that if a message recipient took a snapshot of the snap, the sender would be notified. In fact, the screenshot detection mention could be bypassed.
  • Snapchat collected geolocation data of users when it said it would not.
  • Snapchat told users to enter their mobile number to find friends who also use the app, implying that the user’s mobile phone number was the only information it collected. Without the user’s knowledge, Snapchat also collected the names and phone numbers of all contacts in the address book on the user’s phone.

So what’s the significance of the settlement? Here are a few quick takeaways.

  • Descriptions of mobile apps in an app marketplace like iTunes App Store or Google Play are product descriptions that could be the basis for false advertising claims.
  • Including boilerplate language in an app description, terms of use, or privacy policy is a bad idea if you don’t know what it means or can’t verify its accuracy. Snapchat’s privacy policy told users that it “did not ask for, track, or access any location-specific information.” A lot of apps say that. The problem was that Snapchat integrated an analytics tracking service in the Android version of the app that did collect location information.
  • Take into account exploits and workarounds when drafting privacy policies and product descriptions. This includes software that uses the app’s API.
  • The FTC is getting more active in pursuing false advertising claims against mobile app makers. In December of last year, the FTC settled charges that the developer of the “Brightest Flashlight Free” app deceived consumers about how their geolocation information would be shared with advertising networks and other third parties. The FTC’s interest in suing companies that allow a data breach to occur is also a growing concern, especially after the New Jersey federal district court’s decision in FTC v. Wyndham Worldwide Corp., recognizing the FTC’s authority to prosecute cases where a company is alleged to have failed to maintain “reasonable and appropriate data security for consumers’ sensitive personal information.”
  • Information transmitted over the Internet is rarely, if ever, gone forever. Somehow, somewhere, electronic data can be retrieved.
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