Social Media Contracts – The Quest for Fairness and the Need for Reform
In a constant search of new ways to generate revenue, social media giants are transitioning from business models that have largely been focusing on (targeted) advertising, to capitalising on the social transformation of influence. In these new ecosystems monetizing attention and parasocial relations, traditional contractual relationships are altered in ways we do not yet fully grasp. Gratuitous contracts with payment as counter-performance coexist with cascading new digital services around subscriptions, tokens, micro-transactions, and other forms of monetization that allow social media platforms to rely less on advertising business models.
The Verfassungsblog Radical Reforms symposium is based on the presupposition that the social media landscape is changing. Coined as ‘the new public forum’ (see for example Packingham v North Carolina 137 S. Ct. 1730, also Pozen’s The Perilous Public Square), we see that that public square is now filled with citizens selling products, promoting services, and charging for subscriptions. Simultaneously, the owner of the square is incentivising attention-seeking behaviours (also known as ‘clout-chasing’). In that changing landscape, a regulatory quest for fairness manifests itself. How can a space that is becoming increasingly commercialised, monetised, and is a source of income for many be fair?
Departing from this foundational question, this symposium pursues many more granular ones, each anchored in whether and how the rights of users in social media spaces can be strengthened vis-à-vis dominant platforms. One point of departure are the standard agreements which users conclude when joining social media; does the extant contract law paradigm sufficiently protect the user online? Centrally, a division emerges between the average user and the so-called ‘influencer’. Some user groups who generate content and, in turn, income, may demand their share in a fair division of value. But in the pursuit of attention, clout, and eyeballs, not every means of surpassing minimum thresholds necessary for generating income may be desirable from a societal point of view. Indeed, as society is gradually enmeshing ‘real’ with ‘virtual’, the dynamics of the privately-owned, increasingly commercialised virtual world can skew how information is shared and spread to the average user. Can social media contracts contribute to making the status quo bearable for society at large, and fair for average users and influencers on the personalised level? In the end, the sum of these questions all boil down to power: who gets to decide on the digital landscape, and with whose interest in mind should that decision be made.
Against an increasingly complex background, even basic questions relating to the expectations of parties (especially consumers) to social media contracts, or the nature and content of their performances, threaten existing legal doctrines and fundamental principles aiming to alleviate the imbalance of power in these transactions, such as fairness, good faith or unconscionability. So what if we rethought social media contracts in a radical way? What values should we prioritise in the relationships between users and social media platforms, and how can they be facilitated? This symposium invites its participants to rethink social media contracts, whether based on insights from technology, behaviour and/or legal doctrine, to map and address the inherent vulnerabilities of this space and the individuals affected the most therein.
What about rights?
The idea of fairness online can be assessed from the perspective of rights and obligations. Users and platforms have rights and obligations toward one another. If those rights are violated by either, the violation causes a change in the relationship. But in defining rights and obligations, the question from what legal sources those rights should arise is a first stumbling block. In this context, Laura Aade reflects on the absence of formalism when concluding contracts with social media platforms. Conceptually, there is a big distance between clicking ‘yes’ on a clickwrap agreement, versus putting your signature under a physical contract, although the contractual relationship exists either way. The predicament of informal social media contracts compounds, as the wording of their standard terms is moving towards increasingly oversimplified and (potentially) legally meaningless fluff. The consequences are a threat to the establishment of a fair contractual relationship between platforms and users.
Social media users’ rights and obligations are currently laid down in a uniform manner: the same rules apply to all users, whereas not all users use the multifaceted social media space in the same manner. In Omri Beh-Shahar’s contribution, reflecting his recent book with Ariel Porat, he explores how social media data can serve to inform more granular, personalised contracts, and immediately qualifies its utility: the behaviours displayed online generate a data profile which is not suitable to inform contracts in areas requiring deliberate choices, informed by individuals’ real preferences. Rather, on social media, the surrounding choice architecture drives individuals and manipulates them to forge gut responses based on instantaneous emotional allure. The implication for personalised social media contracts is that the data source informing granularity may be inappropriate, if not deliberately skewed.
Delving into other rights, such as to intellectual property and copyright, it is doubtful where fundamental rights, such as to freedom of expression, stand in contrast to rights which are primarily commercial in nature, when pursued on social media. This is what Sunimal Mendis explores in her contribution, reflecting upon the tension between platform power and the possibility of imposing obligations on social media to safeguard their users’ rights to rely on quotation and parody exceptions.
Meanwhile, when a social media user qualifies as a consumer, they can rely on consumer protection frameworks vis-à-vis platforms. It remains subject of debate to what extent a social media platform is responsible for offering such protection to consumers against third parties. Drawing on the ‘horizontal effects’ doctrine, introducing the need to interpret fundamental rights in some private relationships, Mateusz Grochowski’s contribution portrays freedom of speech on social media as a consumer service. In the provision of this service, tensions may arise between the Digital Services Act’s holistic approach to standard terms and the existing unfair terms protection that requires a case-by-case analysis, in that it may bifurcate enforcement. Hans Christoph Grigoleit notes in his piece that the existing legal frameworks on contract law and consumer protection are already enabled to curtail many of the excesses of the use of social media, such as dark patterns, unfair contracts and addicting features. The question is whether another regulatory reform is likely to yield any improvements in the quest for fairness.
Contrasting this viewpoint, and singling out the content creator, or ‘prosumer’, Vanessa Mak critically reflects on the need for a regulatory framework that would enable content creators to reclaim power over their creations from the hand that feeds them; Big Tech companies monetize prosumers’ content. While extant consumer law frameworks may protect from disempowerment, true fairness and a recognition of prosumers’ use value would require a deeper evaluation of the ways in which contract law views economic exchange.
Equally important for this understanding is the angle of business users, who often suffer from the same unequal bargaining position towards platforms as their own consumers. Focusing on platform-to-business (P2B) transactions, Niva Elkin-Koren, Ohad Somech and Maayan Perel emphasise the contractual lens for addressing the rights of businesses in P2B transactions: Contract law has the potential for greater sensitivity to contract classifications because different types of contractual relations invoke different values and trade-offs. Courts can better posit them in the spectrum between business and consumer contracts, while securing business users‘ unique interests.
What about value?
More than ever, value is created on and through social media spaces, causing a pressing need for radical reform, as already touched upon by Vanessa Mak’s contribution. At the most basic level, users create value by sacrificing data and attention in order to use social media platforms. Johann Laux contemplates whether the application of that data and attention to the creation of personalised law can lead to a fairer use and provision of social media. This depends on the interests such personalised law seeks to serve; if personalisation serves the interest of advertisers, as it currently does, we are simply postponing solving the inequitable problems private platforms cause, creating ‘the future’s future problems’. Beyond the exchange of intangible data and attention, users increasingly pay monetarily to use social media platforms, across a spectrum of subscription features. According to Christoph Busch, this trend reflects the crisis of the advertising-based business model, and requires a rethinking, as we transition into the subscription economy: social media platforms are no longer a public square, they are above all a marketplace, with novel legal implications.
Users who monetise content and market themselves navigate relationships with social media platforms, as well as the external parties paying for the creation of content. The most salient of platforms – Tiktok, Meta, YouTube – are mirrored by a parallel universe containing what Jing Zeng calls the ‘dark economy’, surrounding ‘dark platforms’, which operate outside of mainstream attention. These spaces are populated by the ‘deplatformed’, and those creators who popular social media platforms deem too risky. In her contribution, Zeng shares empirical insights from media studies and allows us to better grasp the characteristics of this dark economy. Returning to the mainstream platforms, and operating on a knife’s edge, Giovanni De Gregorio questions the monetization of harmful but legal content. In the marketplace of attention, it is usually sensational, lawful but awful content that produces the most engagement and, in turn, income. This reality raises a multi-dimensional fairness issue: is it fair to those who suffer detriment from harmful content that such content may go ‘viral’, and generate revenue to individuals exercising their right to spread such content at scale? De Gregorio highlights the often superficial boundaries between illegal and harmful content, as well as between political and commercial speech, all of which have important implications on the content monetization pipeline.
What about society?
The call for fairness is also a reconciliatory effort; how do we reconcile the interests of individuals, of the platforms facilitating their exchange, and of society at large. An area that has not been given sufficient attention in this regard is how social media accounts survive individuals who are no longer among us, and no longer have agency. What are the inheritance implications of social media contracts, and what societal values do they challenge? This is precisely what Chantal Mak addresses in her contribution, based on a co-authored report for the Dutch Ministry of Internal Affairs.
Also looking at the impact of future business models on society, Michael Veale’s piece focuses on the monetisation of influence on social media, and conceptualises recent trends by channelling the words of artist and essayist Momus: ‘in the future everyone will be famous for fifteen people’. This encapsulates advertising shifts from mega- to micro-influencers, as a way to capture the rising importance of authenticity in content monetisation. Veale explores the potential future of influencer marketing by outlining how machine learning technologies could impact advertising strategies in this industry.
But when some creators push their content into the grey areas of the law, and start selling or promoting content or goods and services that may be detrimental to consumers, additional risks arise for society. Is it desirable or fair that a society is increasingly confronted with such content, especially considering the fact that we are becoming aware of the risks that misleading content can produce? Felix Pflücke tackles this issue by referring to the growing activity of financial influencers, who often convey investment information to consumers without having any of the formal requirements of providing such advice. It follows that in regulating an essentially private law and increasingly commercial phenomenon, it is important to account for its societal effects.
In actuality, the way fairness is framed in the social media space will affect public discourse, election outcomes and as such, public wellbeing. That point in itself is scary enough to radically rethink how social media contracts are viewed.
The regulatory quest for fairness in the social media space is a never-ending one, due to the lagging nature of regulation in a fast-paced environment like the internet. With this symposium, we challenged our participants to radically rethink social media contracts. In this introduction, we looked at what social media may not be. It may not be solely a public square, because content monetization and social commerce are booming and turning social media platforms into actual marketplaces. Yet they may also not be mere marketplaces, as whatever happens on social media affects the public interest. Free speech on social media is also no longer a triangle, as Jack Balkin once famously held, given that the stakeholders and the networks involved go way beyond states, platforms and individuals. We have businesses of all sizes, industries of all types, consumers acting as traders, and a lot of other complex relations. So what is social media then in 2023? It is everything, everywhere, all at once, which unfolds at the click of a button launching someone into a contract.
The contributions in this symposium address different aspects of social media contracts, all in search of fairness. In some of these aspects, a radical rethinking of those contracts is proposed: the development of the social media space has outpaced the regulator significantly, requiring us to radically change our approach. Other contributions are more conservative: despite acknowledging the rapid development of the internet and its sometimes radical excesses, current legal frameworks provide enough tools to address them and ensure fairness. The future will require us to continue to rethink social media contracts, most likely in an ever-more radical way; the internet is built for a regulatory cat and mouse game in pursuit of fairness.
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