Free for a Fee

Consumerist is breaking an interesting story this evening. Seems Facebook has updated its terms of service, and added further restrictions onto content uploaded onto the site.

In both the old and the new version, these were the terms by which users uploaded content onto Facebook:

You are solely responsible for the User Content that you Post on or through the Facebook Service. You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising, each of (a) and (b) on or in connection with the Facebook Service or the promotion thereof.

The key words here are “irrevocable, perpetual, non-exclusive, transferable, fully-paid worldwide license.”  Irrevocable as in you can’t revoke it, perpetual as in never-ending, non-exclusive meaning Facebook can license this but cannot restrict you from licensing it, and transferable as in Facebook can assign the rights to a third party for their use. This part shouldn’t shock you. These are the terms by which most websites that allow you to post content hold. Take, for example, YouTube:

For clarity, you retain all of your ownership rights in your User Submissions. However, by submitting User Submissions to YouTube, you hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the User Submissions in connection with the YouTube Website and YouTube’s (and its successors’ and affiliates’) business, including without limitation for promoting and redistributing part or all of the YouTube Website (and derivative works thereof) in any media formats and through any media channels. You also hereby grant each user of the YouTube Website a non-exclusive license to access your User Submissions through the Website, and to use, reproduce, distribute, display and perform such User Submissions as permitted through the functionality of the Website and under these Terms of Service.

However, rather logically, these broad licenses have usually been held valid only for as long as the user stays on the site. In other words, take content down and the license expires. The very next sentences of the YouTube terms of service states:

The above licenses granted by you in User Videos terminate within a commercially reasonable time after you remove or delete your User Videos from the YouTube Website. You understand and agree, however, that YouTube may retain, but not display, distribute, or perform, server copies of User Submissions that have been removed or deleted.

And, indeed, according to Consumerist, citing archive.org, Facebook had similar language until very recently:

You may remove your User Content from the Site at any time. If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content.

Now, under the current terms those lines are gone, and instead in another section:

The following sections will survive any termination of your use of the Facebook Service: Prohibited Conduct, User Content, Your Privacy Practices, Gift Credits, Ownership; Proprietary Rights, Licenses, Submissions, User Disputes; Complaints, Indemnity, General Disclaimers, Limitation on Liability, Termination and Changes to the Facebook Service, Arbitration, Governing Law; Venue and Jurisdiction and Other.

Oh, and Want to bring a claim against Facebook on this issue? Hope you’ve got a good California lawyer:

You agree that all claims and disputes between you and Facebook that arise out of or relate in any way to the Terms or your use of the Facebook Service will be governed by the laws of the State of California (and United States federal laws applicable therein), without regard to principles of conflict of laws. You further agree that you will bring any claims or disputes that are not subject to arbitration (as set forth above) in, and you submit to the exclusive jurisdiction of, the state and federal courts located in Santa Clara County, California.

The Civil Proceudre geeks will have visions of Carnival Cruise Lines v. Shute dancing in their heads tonight. Be sure to also read what Consumerist thinks of that binding arbitration clause.

Now, what does this all mean?  It’s hard to say, exactly. With the exception that the new Facebook license cannot naturally lapse, this is little different than the terms of most content-based websites, and for virtually all this passes under the user radar. The balance between letting people do what they like online and letting the company use the content of its users has never faced a solid challenge, aside from a few Flickr scandals. I predict it will come down to some event where a band on Facebook’s music portal uploads a song, later makes it big, and then Facebook somehow cashes in on their rights to distribute and puts it on a Facebook ad. The band sues because they didn’t read the contract, the court upholds it because not reading a contract is hardly an excuse, and then the public will backlash. Even given this scenario, however, I’m not sure I would advise a band or photographer or other creative artists to not use Facebook. The value of the market exposure may even outweigh this loss of control, based on the value schemes of most artists today. There are those who seek much greater control, and to them they’d be wise to stay off Facebook until this settles.

More than anything, I feel this will impact Facebook’s ability to draw in successful commercial content onto their site. My upstart college band may be okay with this somewhat-Faustian bargain, but most bands with a record deal either will not or contractually cannot enter into any sort of perpetual license scenario. At least with other sites the artist has the power to pull the plug. Here, Facebok would seek to eliminate that option.